New North Sea tax break announced

Chancellor George Osborne has announced a new tax allowance designed to allow oil and gas companies to get the most out of mature fields, known as brown fields.

The measure, labelled The Brown Field Allowance will allow companies to shield up to £250 million of income in qualifying projects, or £500 million for projects in fields paying Petroleum Revenue Tax.

Qualifying projects must have been authorised by the Department of Energy and Climate Change (DECC) on or after 7 September 2102 and the level of relief available to an individual project will depend on its size and unit costs.

Announcing the news, Osborne said: "Today's tax allowance is more good news for the North Sea, good news for jobs and good news for the broader economy. It will give companies the incentive to get the most out of older fields, creating jobs and delivering more revenue for taxpayers."

This latest announcement follows others made this year, including the Government's commitment to the signing of contracts with industry to guarantee their long-term level of tax relief on decommissioning used assets.