UK Offshore Industry Pressures Government to Accelerate Tax Reform

The proposed tax shift aims to replace the existing Energy Profits Levy with a new, price-triggered mechanism that applies a 35% levy on revenues when oil prices exceed $90 per barrel and gas prices top 90p per therm. This sits atop the standard 30% ring-fenced corporation tax and a 10% supplementary charge. Industry leaders contend that the current fiscal volatility, exacerbated by repeated policy changes since 2022, has made long-term investment planning nearly impossible for North Sea operators.

OEUK Chief Executive David Whitehouse emphasized that the current levy structure actively discourages investment, accelerating a decline that impacts regional economies across the country. By pulling forward the tax reform to January 2027, the sector claims it can unlock billions in private capital while bolstering the nation's energy supply. The total projected gain of £14.9 billion includes £2.4 billion from the new levy trajectory and £12.6 billion derived from associated payroll taxes over the next decade. The group has formally petitioned Chancellor John Healey to adopt this accelerated timeline to restore confidence in the UK Continental Shelf.