Commenting on the impact of measures announced in today’s Budget on the UK Oil and Gas industry, Andrew Lister, Energy Tax Partner at KPMG, said:
“Much to the disappointment of all in the oil and gas industry in the UK – and despite extensive consultation with them - the Chancellor confirmed in his Budget that the Government will go ahead with new rules that will increase the cost to companies in this sector of doing business here in the UK.
“The increased costs of those service companies will need to be passed on to the UK companies searching for and extracting oil and gas from UK waters."
“The amount of tax estimated to be raised per annum from these proposals is around £130m. The impact on the oil industry is expected to be significant due to the low forecast margins for many new and incremental projects. This will weaken the UK’s competitive position for attracting investment."
“In addition to confirming these changes, a review of the oil and gas fiscal regime was also announced. It may be the opinion of many in the sector that the fiscal review would perhaps have been better served including these changes in its ambit.”
- ENDS -
For further information please contact:
Katy Broomhead, KPMG Corporate Communications
T: 0161 246 4623
M: 07824 537963
KPMG Press office: +44 (0)207 694 8773
Follow us on twitter: @kpmguk #budget2014
Chancellor’s Budget 2014
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.