North sea energy explorers could save as much as £160 million after Chancellor George Osborne announced new tax breaks for older oil and gas fields.
Explorers will no longer have to pay full duty on their income from these fields to ensure they are fully exploited.
The new Brown Field Allowance will shield up to £500 million of income from tax when firms boost production from established oil or gas fields, resulting in the potential £160 million saving.
This is the latest concession from Osborne, who came under fire for hiking the supplementary charge on North Sea producers from 20% to 32% last year. The Treasury will take a hit but Osborne said there was a long-term benefit. “It gives companies the incentive to get the most out of older fields, creating jobs and delivering more revenue for taxpayers,” he said.
