Commenting on the Chancellor’s proposals for the UK oil & gas industry, Derek Henderson, senior partner for Deloitte in Aberdeen, said:
“Today’s oil & gas tax package demonstrates that government has been listening to the acute challenges facing the North Sea in 2016. The 10% cut in the Supplementary Charge and permanent zero rating of Petroleum Revenue Tax, both effective from January 1 2016, combined with additional help for critical infrastructure, bear this out. At a time of low oil & gas prices and challenging conditions, headline North Sea tax rates are now globally competitive, now at 40% instead of the 62%-81% they were 18 months ago.
“While the OBR estimates that the proposed changes will reduce the UK North Sea tax burden by £1billion over the next five years, it is over the longer term that the benefits will be felt by the industry. The UK now needs to compete harder for its share of global investment than ever before and retaining activity and expertise during the downturn will be critical to secure the long-term future of the UK North Sea.”