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<p><strong>T</strong>ransferable tax history is forecast to increase tax receipts
from oil and gas production by £65m between tax years 2018-19 and 2023-24.</p><p>
</p><p>It would therefore be unnecessary to set aside additional funding to implement
this policy.</p><p> </p><p>Wider decommissioning tax relief is provided to companies
undertaking decommissioning activities through deductions against current or future
taxable profits and, in some situations, repayments of previously paid tax.</p><p>
</p><p>The UK oil and gas industry is expected to pay an additional £13bn of tax over
the next 5 years, net of tax repayments for decommissioning tax relief.</p><p> </p><p>The
Government publishes OBR verified forecasts of future tax receipts for the 5 year
period up to year 2023/24.</p><p> </p><p>Government internal projections for TTH beyond
2023/24 show it will continue to be revenue positive for the Exchequer.</p><p> </p><p>Para
5 (d) of Schedule 14 to the Finance Bill (No.3) 2017-19 determines the “uplifted decommissioning
cost estimate”. This refers to the maximum possible amount of tax history that the
seller can transfer to a purchaser under a transferable tax history election. It does
not represent the actual tax relief that the purchaser will receive from making a
claim for transferable tax history.</p><p> </p><p>The amount of transferable tax history
that a purchaser can claim will always be limited to the activated amount of transferable
tax history. The activated amount is defined as the extent by which decommissioning
costs of the transferred field exceed the tracked profits of the transferred field.</p><p>
</p><p>If a purchaser is able to make a claim for transferable tax history they cannot
receive a larger repayment than the seller would have received for undertaking the
same decommissioning work.</p><p> </p><p>The current estimate of the exchequer’s liability
for decommissioning costs is therefore unaffected by the introduction of transferable
tax history.</p><p> </p><p>Government tax revenues from North Sea Oil and Gas companies
over the last three years are reproduced in the table below. More details can be found
in Table 11.11 in the publication “<em>Statistics of Government revenues from UK Oil
and Gas production</em>”.</p><p> </p><p>Tax repayments are made to ring-fenced oil
and gas companies if the assessment of tax due from an earlier period is revised downwards.
This can be the result of many factors, including decommissioning tax relief. Estimates
of total tax relief arising from decommissioning expenditure will be published by
HMRC in <em>Estimated Costs of Tax Reliefs</em> in early 2019.</p><p> </p><p> </p><table><tbody><tr><td><p>
</p></td><td><p>2015-16</p></td><td><p>2016-17</p></td><td><p>2017-18</p></td></tr><tr><td><p>Total
tax revenues (£m)</p></td><td><p>-2</p></td><td><p>-350</p></td><td><p>1,188</p></td></tr></tbody></table><p>
</p><p><a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/740260/Table_11.11__Sept_2018_.pdf"
target="_blank">https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/740260/Table_11.11__Sept_2018_.pdf</a></p><p>
</p><p><strong> </strong></p><p> </p>
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