皇冠体育app

皇冠体育app government today announced that the annual rate of the Ring Fence Expenditure Supplement (RFES) for the North Sea fiscal regime will be increased from 6% to 10%, following discussions with industry initiated at the 2011 Budget. This provides extra support for investment in the North Sea, including in marginal fields that qualify for the current field allowance, and will also support the ongoing considerations on new categories of field allowance.

In the Budget, as part of a package of measures to help motorists cope with high petrol prices, the government announced a Fair Fuel Stabiliser that would be funded by higher taxation of the profits from oil and gas companies when oil prices are high. 皇冠体育app government said at that time that it would consider with the oil and gas industry the case for a new category of field that would qualify for field allowance to support investment in marginal fields.

In the course of those discussions with industry, the government has identified that the ability of a company to benefit fully from the field allowance is dependent on whether a company has sufficient current taxable income against which to off-set expenditure. This is addressed to some extent by the Ring Fence Expenditure Supplement, which currently allows companies with insufficient taxable income to uprate losses by 6% for six accounting periods.

皇冠体育app increase to 10% announced today will help ensure existing field allowances work more effectively and equitably to support investment in marginal fields. It also brings RFES in line with the discount rate typically used by the sector.

皇冠体育app government will continue to engage with oil and gas companies on the case for new categories of field qualifying for field allowance.

Justine Greening, Economic Secretary to the Treasury, said:

皇冠体育app government was clear at the Budget that it would engage with oil and gas companies, including to consider the case for further support for marginal projects. Today鈥檚 change demonstrates our commitment to ensure current allowances work effectively and equitably, and lays the groundwork for further constructive discussions on field allowances.

Notes for Editors

1. 皇冠体育app RFES, which was introduced in 2006, assists companies that do not yet have sufficient taxable income for ring fence corporation tax purposes against which fully to set their exploration, appraisal and development costs. 皇冠体育app RFES currently allows companies to elect to increase the value of losses carried forward from one period to the next by 6% for a maximum of 6 years, not necessarily consecutively. It is described in detail in .

2. Increases in the rate of supplement may be made by Order. 皇冠体育app government intends to lay the necessary Order before the House of Commons in the autumn, with the increase in RFES effective from 1 January 2012.

3. 皇冠体育app OBR will publish the full scorecard costings of this measure over the forecast period at the time of its autumn forecast. Initial estimations are that the change is expected to cost around 拢50m a year by the end of the forecast period (2015-16).

4. 皇冠体育app current categories of field qualifying for field allowance are small fields, ultra heavy oil fields, ultra high-pressure/high-temperature fields, and remote deep water gas fields. Further details on how the field allowance works are available on the

5. At the Budget, the government announced: 鈥淩ecognising the importance of continued investment in the North Sea, including in marginal gas fields, the Government will also consider with the industry the case for introducing a new category of field that would qualify for field allowance.鈥�

Today鈥檚 announcement reflects the progress made so far in these discussions, and the Government will continue to engage closely with the oil and gas sector to consider the case for further support.