UK Oil and Gas Group Says Earlier Tax Shift Could Raise £14.9 Billion
A new fiscal regime in the UK from 2027 could deliver an additional £14.9 billion, or $20 billion, to Britain’s revenues, the leading offshore industry group said in its annual Economic Report, calling on the Burnham government to bring forward the tax change planned for 2030. Offshore Energies UK (OEUK) wants the Oil and Gas Revenue Levy, a price-triggered mechanism planned to replace the…
The UK oil and gas industry group, Offshore Energies UK (OEUK), has stated that an earlier implementation of the new fiscal regime could generate an additional £14.9 billion, or approximately $20 billion, for Britain's treasury. In their annual Economic Report, OEUK has urged the government to bring forward the tax change initially planned for 2030 to January 2027.
The UK has experienced multiple tax regime changes since 2022, causing uncertainty and leading companies to withdraw from the North Sea. Since the introduction of the windfall tax in 2022 during the height of the energy crisis, oil and gas companies have been calling for stability in the regulatory and tax framework. The proposed Oil and Gas Revenue Levy (OGRL) aims to address this by imposing a 35% levy on revenues when oil prices exceed $90 per barrel or gas prices exceed 90p per therm.
The OGRL would be implemented alongside the existing 30% corporation tax rate and a supplementary charge of 10%. By adopting the OGRL in 2027, rather than the current proposal for 2030, OEUK estimates an extra £2.4 billion in revenue from the current trajectory of taxes over the next decade, with an additional £12.6 billion from payroll taxes, totaling £14.9 billion.
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