Today’s announcements were a rabbit out the hat for the industry, especially the Petroleum Revenue Tax (PRT) reduction, as many had thought that this would only be considered later in the fiscal review process.
Reducing the rate of PRT will not only support older fields but also be a boost for North Sea infrastructure. This is critical to the long term future of the Basin, by extending the life span of these fields and delaying decommissioning.
The cut to the Supplementary Charge to Tax (SCT) rate will benefit companies investing in the North Sea in the long term and shows that HM Treasury have listened and understood the pressing danger the industry is facing.
The tax cuts are good PR for the UK, and will attract the attention of CEOs who are considering investments on the Continental Shelf.
These measures are only part of the solution to making the UK basin more competitive. Industry will look to work together with HM Treasury and the Oil & Gas Authority to enhance the attractiveness of investing in the UK oil industry going forward.
- ENDS -
Ann Burton, KPMG Press Office
T: +44 (0)20 7311 6497
M: +4 (0)7467 339 719
KPMG Press Office: +44 (0)20 7694 8773
Follow us on twitter: @kpmguk #budget15
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 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.