Summer Budget 2015 – Energy, mining and renewables

The Summer Budget 2015 contains some measures that may be of interest to companies in the energy, mining and renewables sectors, as follows:
  • UK corporation tax will reduce from 20% to 19% in 2017 and to 18% in 2020.
  • For the offshore sector, the government has announced that it will broaden the application of the basin wide investment and cluster area allowances in order to support investments on the UK Continental Shelf. The definition of investment expenditure will be extended to include certain discretionary non-capital spend and long term leasing of production units.  This allowances exempts a portion of a company’s profits from the supplementary charge.
  • The government has announced that it will publish proposals on extending competitive tendering to onshore electricity transmission assets.
  • The Annual Investment Allowance (AIA) for UK resident companies will remain at £200,000 per annum for expenditure on plant and machinery on or after 1 January 2016.
  • The government will remove corporation tax relief for companies in respect of purchased goodwill and customer related intangible assets. This will apply to acquisitions made on or after 8 July 2015. Relief will still be available if the goodwill is sold.
  • For groups that have controlled foreign companies (CFCs), the ability for companies to use UK losses and reliefs against a CFC charge will be removed from 8 July 2015.
  • Changes will be made to the taxation of non-UK domiciled individuals. From April 2017, individuals who have been UK resident for more than 15 of the previous 20 tax years will be regarded as UK domiciled for tax purposes. Furthermore, it will no longer be possible for an individual born in the UK to parents who are UK domiciled to claim non-UK domiciled status if they leave but then return and take up residency in the UK.
  • The government announced that it will push for a global climate deal later this year that keeps the goal of limiting global warming to two degrees 'firmly in reach'.
  • The Government will review the business energy efficiency tax landscape and “consider approaches to simplify and improve the effectiveness of the regime”. A consultation will be launched in Autumn 2015.
  • In order to enable consumers to save money on their energy bills, the government aims to introduce 24 hour switching by the end of 2018.
The climate change levy exemption for renewable electricity will be removed

For further information, please contact us.
 

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Energy, mining & renewables