On 20 March 2013 in his Spring Budget George Osborne, the Chancellor of the Exchequer, announced the following key business tax measures to give a boost to the developing shale gas industry in the UK.
Supporting its announcement in the 2012 Autumn Statement, the UK Government is now consulting on tax measures to encourage investment in the exploration and production of shale gas in the UK.
The Chancellor’s proposals included the following:
- the introduction of a new shale gas field allowance in the Finance Bill 2014.
- an extension of the Ring-Fence Expenditure Supplement from 6 to 10 years for shale gas projects.
The Chancellor announced the development of ‘robust planning guidance’. The UK Government aims, by July 2013, to provide technical planning guidance for local authorities on shale gas to clarify planning requirements for shale gas during the exploration phase and to ensure that local communities benefit from shale gas projects.
The UK Government also announced its objective to develop further the role and responsibilities for the Office for Unconventional Gas and Oil. In his budget speech yesterday, Mr Osborne said that ‘shale gas was part of the future and we will make it happen’.
These tax measures and his encouragement to the planning authorities to allow shale projects to go ahead are good news for the industry and should promote investment in exploration for shale gas.
Information is very limited at present and we shall report further as soon as more details are circulated.