There are a number of measures in the Autumn Statement 2014 which are of relevance to the energy, mining and renewables sectors, as summarised below:
- The government wants the UK to lead the way with shale gas regulation and will provide a new £5 million fund to provide independent evidence to the public about the robustness of the existing regulatory shale gas regime. The government will also fund new sub-surface research test centres.
- R&D tax credits will be increased. The rate of the ‘above the line‘ credit will increase from 10% to 11% and the SME scheme rate will increase from 225% to 230% from 1 April 2015. However, qualifying expenditure for R&D tax credits will be restricted from 1 April 2015 so that the costs of materials incorporated in products that are sold, are not eligible.
- As expected, the UK government will introduce legislation that gives it the power to implement the OECD model for country by country reporting. These rules will require multi-national enterprises to provide high level information to HMRC on their global allocation of profits and taxes paid, as well as indicators of economic activity in a country.
- A number of measures have been introduced of relevance to the oil and gas sector:
- the government will introduce an immediate 2% reduction in the rate of the supplementary charge from 32% to 30%, with effect from 1 January 2015 and will aim to reduce the rate further in the future;
- the government will extend the ring-fence expenditure supplement from 6-10 accounting periods for all ring-fence oil and gas losses and qualifying pre-commencement expenditure incurred on or before 5 December 2013;
- the government is introducing an allowance to support the development of high pressure, high temperature projects. From 3 December 2014, an amount of profits equal to 62.5% of the qualifying capital expenditure a company incurs, will be exempt from the supplementary charge.
- A new exemption from withholding tax on interest on qualifying private placements (a type of unlisted debt) have been announced to help the provision of new finance for businesses and infrastructure projects.
Energy, mining & renewables