The UK government has given a boost to the country’s budding shale gas industry. In order to propose early investment in the industry, it has been announced that there will be a “generous new tax regime”, with tax breaks such as field allowances (which will allow developers to off-set profits from their shale gas exploitation against any other losses in the company, which they would not otherwise be able to do under UK law). The announcement came as part of the 2013 Budget Speech, given by George Osborne, Chancellor of the Exchequer.
Osborne said: “I want Britain to tap into new sources of low cost energy like shale gas. So I am introducing a generous new tax regime, including a shale gas field allowance, to promote early investment. And by the summer, new planning guidance will be available alongside specific proposals to allow local communities to benefit. Shale gas is part of the future, and we will make it happen.”
This further development, in addition to the lifting of the moratorium on fracking in December, gives momentum to the development of the shale gas industry in the UK. The next step is likely to be drafting of relevant legislation, a topic we have previously discussed; click here for further information.