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East Midlands Chamber News

Tax cuts for fracking firms

george osborne Altogetherfool(flickr.com), licensed under CC BY-SA 2.0Chancellor George Osborne has pledged to make Britain's tax regime the "most generous in the world" for shale gas extraction companies.

He has promised the Treasury will press ahead with promised tax breaks for fracking firms.

“I want Britain to be a leader of the shale gas revolution – because it has the potential to create thousands of jobs and keep energy bills low for millions of people," Mr Osborne said.

A new tax allowance will see a certain portion of income from each shale gas “pad” — production site – receive an effective tax rate of 30pc, rather than 62pc.

The tax break is similar to those on offer to oil and gas explorers in technically-challenging and less economic fields in the North Sea, where they have been credited with revitalising interest.

The Government hopes fracking could provide an important new source of gas for the UK.

Mr Osborne said: “Shale gas is a resource with huge potential to broaden the UK’s energy mix. We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that."