Derek Leith, EY’s Global Oil and Gas Tax Lead, predicts the Chancellor will continue on a course of stability for the oil and gas industry
“The priority for the UK oil and gas industry in recent years has been stability and there is no obvious reason for the Chancellor to make an announcement to divert from this course in his Autumn Budget.
“Despite the oil price rising and breaching the $85 per barrel mark in recent weeks, the Chancellor is likely to maintain a steady legislative environment. This reflects a widely held view of industry leaders that such a move could boost the long-term prospects for the UK Continental Shelf. Only a couple of months ago the Exchequer Secretary to the Treasury shared reassurances with the industry that there were no plans for tax increases. It would therefore be surprising if this was a course of action announced on October 29, and it would be most unwelcome.
“It is much more likely the Chancellor will make a positive statement on the importance of the Driving Investment principles, released by HMT in 2014, to the UK’s oil and gas industry, demonstrating the shared vision for the future of industry and government.
“In terms of transferable tax history (TTH), this was announced at the previous budget and is now very close to enactment through legislation. As such we are unlikely to see a change or major modification to the direction of travel on this welcome, and novel, measure. It may not even be mentioned, but if it is it will probably be to reaffirm the Chancellor’s commitment to TTH.”