Latest figures from HM Revenue and Customs (HMRC) suggest oil and gas tax revenues are officially since the first time since the industry downturn “in the black”.
Tax receipts have been steadily increasing and a total figure of £1.1bn was recorded for 2017-18. Figures from 2016-17 indicated a loss of over £316m.
Petroleum specific revenue tax is still in the red area, due to significant numbers of tax credits but corporation tax receipts alone have rapidly increased to a final total of £1.6bn.
According to Oil and Gas UK, the leading trade association for the UK offshore oil and gas industry, the growth of tax revenue is widely due to cost effectiveness and the steady increase of oil prices.
Mike Tholen, from Oil and Gas UK, says: “The oil price improvements in recent months will have helped but much of the tax improvements you have seen in 2017-18 were at much lower oil prices. So, the improvements were coming despite the oil price changes and indeed the oil price will help.”
“Funnily enough I think the industry likes to see us paying taxes because it shows that we are making profits, that we are an attractive place to invest and that signals that the industry is alive and well, despite the troubles of recent times.”