17 March 2005
The chancellor's Budget announced yesterday has been greeted with contrasting feelings by the UK's offshore gas industry.
Gordon Brown's decision not to increase the tax burden on the industry but to advance some of their payments means that around £1 billion of tax payments have essentially been brought into the forthcoming tax year.
These were originally due to be paid a year later in 2006/7 and according to the chief executive of the UK Offshore Operators Association, Malcolm Webb, are now likely have some impact on the nation's consumers.
"We can appreciate the government's desire to align and harmonise the payment of Corporation Tax and Petroleum Revenue Tax in this way," said Mr Webb.
"But," he added, "there will be higher finance costs from the earlier payment of Corporation Tax."
The Corporation Tax and Petroleum Revenue Tax will now be more closely aligned so that Corporation Tax is paid in three rather than four equal instalments. The acceleration of tax payments year on year will however force finance costs to increase.
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