The Chartered Institute of Taxation (CIOT) has welcomed Chancellor George Osborne’s announcement today during the Budget that the Petroleum Revenue Tax (PRT) would be ‘effectively abolished’.
The tax was cut in last year’s budget from 50% to 35% but has continued to adversely affect Scotland’s beleaguered Oil & Gas industry. The tax rate will fall to 0% for chargeable periods ending after 31 December 2015. The industry, which is a major employer in Scotland’s North-East, will also benefit from a reduction in the supplementary charge for oil companies from 20% to 10% and this will be backdated to 1 January 2016.
Chair of the CIOT’s Scottish Technical Committee, Moira Kelly, commented:
“We welcome the Chancellor’s announcement today which will give a welcome sigh of relief to an industry which has struggled to cope with decreasing oil prices. The industry employs hundreds of thousands of individuals in Scotland; the cut in the PRT and supplementary charge signals that the Government has taken a long-term view to protect the industry in recognising that its role is to mitigate as best it can against the natural fluctuation of the oil and gas commodity prices.”