UK Treasury Rejects Oil Tax Concessions

by Robert Lee, Tax-News.com, London

19 June 2002

The UK Treasury Department has rejected attempts by the oil industry, and by the Conservative and Liberal Democrat parties to ease the burden on North Sea offshore oil operators following Chancellor Gordon Brown's budget tax hike, according to a report from the Accountancy Age news service this week.

The accounting journal reveals that, during a series of Commons debates, Financial Secretary to the Treasury Ruth Kelly has repeatedly denied that the 10% surcharge on the corporate profits of North Sea oil operators will cost jobs and investment in the region, and has refused to consider measures that could alleviate some of the tax burden for such companies.

Speaking to the Finance Bill Committee recently, Ms Kelly announced that she believed that the potential effects of the tax increase had been exaggerated, stating that: 'I do not believe the figures quoted by the oil industry'.

Meanwhile, Accountancy Age announced that the release of a consultative document on the removal of royalties for older oil fields has been delayed, sparking fears that the Treasury wants to delay the introduction of the measure until next year.

The document was due for release on Tuesday 11 June, but is still awaiting the Chancellor's approval, according to the news service.

Recommended