North Sea tax receipts slump to £35m

Shell worker at Brent field in North SeaSculpture copyright Shell

Tax receipts from offshore oil and gas slumped to just £35m in the last economic year, according to figures from HM Revenue and Customs.

The figure is the lowest recorded since the initially days of North Sea production.

Corporation tax from offshore drilling inspired £538m but that was offset by rebates on Petroleum Revenue Tax, totalling £503m.

The fresh figure com res with £2bn of tax revenue in the 2014-15 financial year.

Four years ago, the Cache raised £11bn from the two sources of tax on offshore production profits.

Much of wear year’s fall reflects lower profits from oil and gas, after the oil cost slumped, as well as tax deductions for a high level of investment.

Tax rates were cut by Chancellor George Osborne during the ton recent recorded year.

The Office for Budget Responsibility has forecast voiding tax returns for the next few years.

Industry ‘struggle’

Responding to the tax figures, exertion body Oil and Gas UK’s economics director, Mike Tholen, said: «At yon $40 per barrel, oil is still more than 60% lower than it has been on top of the last three years.

«In these conditions, the UK North Sea industry drive continue to struggle to sustain its current scale.

«More than £330bn in 2014 wealthy has been id to date on UK oil and gas production, however, HM Treasury has noted that tax withstand on production will fall in 2015-16 and fall further by 2021.

«Despite the described fall in production taxes which is a consequence of the current low oil prices, enterprise will remain a significant employer, provider of energy security, hub of alteration and leader in the export of goods and services to overseas markets.»

He added: «Although the sector has mull overed success recently in reducing its cost to produce a barrel of oil or gas by a third, unfortunately the portents suggest that the oil price will remain lower for longer, so it’s vital the ce of these efforts doesn’t abate.»

‘Wake-up call’

Safeguarding charity WWF Scotland director Lang Banks said: «The puzzlers currently affecting tax receipts and jobs in the North Sea should act as a wake-up phone call to government of the urgent need to pre re for a future where we are all less dependent on oil and gas.

«While it’s precise that the oil and gas industry will continue to be a major contributor to our economy for some at all times, now is the time to be setting out a clear plan to sensibly transition away from soiled fossil fuels.

«We need to see a just transition that enables us to harness the engineering slides currently deployed in the North Sea and apply them to supporting a range of cleaner systems of energy production.»

Leave a Reply

Your email address will not be published. Required fields are marked *