PwC today echoed Oil and Gas UK’s call for sweeping tax changes for the industry.
The firm said cutting the headline rate would have a “minimum cost implication for UK Government in the near future whilst companies are loss making and absorbing capital expenditure”.
Alan McCrae, head of tax, said: “Production from oil and gas has been a golden goose for the UK Exchequer to the tune of over £330bn in corporate taxes alone, not taking into account additional revenues from employment taxes, jobs and the supply chain. However, with the current low oil price, the goose is now looking a bit thin and threadbare.
“The Chancellor has the potential to provide a much needed cushion – and, crucially, provide a stimulus for investment and its tax paying employees – in the March Budget. If this is recognised and an effective response is forthcoming, then there may well be plenty of life in the old bird yet.”
The Chancellor should also consider reducing stealth taxes or licences fees in a bid to boost sector recovery, according to the firm.
McCrae added: “With other factors such as over-supply in the market, and the impending transition to a low carbon world, alongside cost management and working capital issues also impacting the UK oil and gas industry, it’s even more vital than ever that corporates, regulators, the supply chain and the UK government work together to secure the North Sea basin’s future value and cement its position as a specialist skills and innovation hub in areas such as decommissioning.”
Earlier today, Oil and Gas UK said the Budget must deliver a 20% tax cut or risk costing the sector hundreds of thousands of jobs. Read more here.
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