Budget 2016: Lawyers warn North Sea tax relief may be "too little, too late"

 
Jessica Morris
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George Osborne Visits Scotland
Osborne halved the supplementary charge on oil and gas companies (Source: Getty)

Lawyers warned that tax relief for the embattled North Sea oil and gas industry in today's Budget may be "too little too late."

It comes as chancellor George Osborne halving the supplementary charge on oil and gas companies from 20 per cent to 10 per cent, backdated to 1 January.

He also "effectively abolished" the petroleum revenue tax, having cut it to 35 per cent from 50 per cent last year.

"The tax cuts are a welcome development for the industry but the Government's action may be a case of too little, too late for some companies," Michael Burns, energy partner at Ashurst, said.

"There is an ongoing need for the government to engage with industry on a proactive basis to mitigate the effects of a 'lower for longer' oil price," Burns added.

This was echoed by David Blumenthal, a senior tax associate at Clyde & Co, who said: "Given the stagnating oil price and fears that we may yet see it fall further before any recovery, there is a sense that whatever the Chancellor does now could be a case of ‘too little, too late’".

"Far more still needs to be done to give a boost to this hard-hit sector of the UK economy."