Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, with reference to paragraph 2.133 of Budget 2016, whether the adjustments to Investment Allowances for oil and gas production in the UK will extend to investment in pipelines.

A Technical Note was published on 16 March 2016 (Budget Day) to clarify aspects of HMRC’s view of the legislation that provides tax relief for decommissioning expenditure. This is available at https://www.gov.uk/government/publications/oil-and-gas-companies-tax-relief-for-decommissioning-expenditure/oil-and-gas-companies-tax-relief-for-decommissioning-expenditure

At Budget 2016, the Government announced the extension of ‘relevant income’ for Investment and Cluster Area Allowances, to include tariff income (payments by a third party for access to infrastructure, including pipelines). By taking a power in Finance Bill 2016 to introduce the extension by secondary legislation, the Government will be able to take further representations from industry on how best to address issues of allocation and transparency.