Contribution to the UK Economy

Tax revenues

The UK economy has benefited from over £215 billion (2005 prices) in North Sea taxes since 1968. This is over and above the investment and expenditure in the UK economy, which has itself created further economic activity and additional fiscal revenues to HM Treasury.

Tax receipts have more than doubled, from £4.5 billion in fiscal year 2003-04 to £9.6 billion in 2005-06, as a result of high oil prices and acceleration of the payment of Corporation Tax announced in the Budget in March, 2005. This will rise further to around £10.3 billion in 2006-07 as a result of the December 2005 tax increase, which increases SCT (the Supplementary Charge to Corporation Tax first introduced in 2002) from 10% to 20%. The Treasury tax forecast is based on a $57 oil price in 2006, however it is anticipated that fiscal revenues will exceed this forecast given that oil prices averaged $64 over the first 4 months of 2006.

Figure 7: UK North Sea Taxes 1991-2007