Clause 272 - Petroleum extraction activities: exploration expenditure supplement

Finance Bill – in a Public Bill Committee at 2:30 pm on 22nd June 2004.

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Question proposed, That the clause stand part of the Bill.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary To the Treasury, Economic Affairs, Shadow Chief Secretary to the Treasury

The clause gives a credit for the costs of exploration if they cannot immediately be deducted for tax. The industry has expected the clause and believes that it is the best that it will get, but the credit is of value only if the field under exploration is profitable, something that obviously cannot be guaranteed because of the very nature of exploration. Therefore, there is some question as to whether the credit will encourage any of the major operators, although some of the smaller operators may feel that they will benefit.

Question put and agreed to.

Clause 272 ordered to stand part of the Bill.

Schedule 36 agreed to.