Offshore Industry: Taxation

Treasury written question – answered on 10th September 2021.

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Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

To ask the Chancellor of the Exchequer, if he will make it his policy to review all tax policy to ensure it does not incentivise oil and gas extraction.

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary, Minister for Equalities

Our domestic oil and gas industry produces the equivalent of around half of the UK’s primary energy needs and will continue to play an important role as we transition to a net zero economy. The industry has paid around £375bn in production taxes to date and supports around 147,000 jobs directly and in their supply chains, employing people in locations right across the country and supporting many more local jobs in sectors that rely on a vibrant oil and gas industry.

The Government places additional taxes on the extraction of oil and gas to ensure a fair return for the nation while also supporting the industry to address genuine costs through targeted tax reliefs, such as those to encourage the safe removal of infrastructure at the end of a field’s life.

The Government keeps all taxes under review, and any changes are made in the round at fiscal events.

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