Country Report

United Kingdom upstream fiscal summary

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26 May 2021

United Kingdom upstream fiscal summary

Report summary

All upstream projects in the UK are governed by concessions. Licences are awarded in regular rounds with fixed fiscal terms. Over the years, the tax system has seen numerous changes. Most recently, lower oil prices and maturity of the UK Continental Shelf have played a decisive role in radical tax cuts. The UK now has one of the most competitive fiscal systems globally. The key elements are the Ring Fence Corporation Tax (RFCT) and Supplementary Charge (SC). There are numerous deductions are available for RFCT and SC.

Table of contents

  • Basis
    • (Offshore) Innovate Licence
    • (Onshore)Petroleum Exploration and Development Licence
  • Government equity participation
    • Bonuses, rentals and fees
    • Indirect taxes
    • Royalty
    • Ring Fence Corporation Tax (RFCT)
    • Ring fencing
    • Rate
    • Base
    • Payment schedule
    • Supplementary Charge (SC)
    • Ring fencing
    • Rate
    • Payment schedule
    • Fiscal treatment of decommissioning
    • Tax rules
    • Transferrable Tax History (TTH)
    • Product pricing
    • Summary of modelled terms
  • Recent history of fiscal changes
  • Stability provisions
  • Split of the barrel and share of profit
  • Effective royalty rate and maximum government share
  • Progressivity
  • Fiscal deterrence

Tables and charts

This report includes 16 images and tables including:

  • Timeline
  • Timeline detail
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate - onshore, shelf and deepwater, oil and gas
  • Maximum government share - onshore, shelf and deepwater, oil and gas
  • State share versus Pre-Share IRR - oil
  • State share versus Pre-Share IRR - gas
  • Investor IRR versus Pre-Share IRR - oil
  • Investor IRR versus Pre-Share IRR - gas
  • Bonuses, rentals and fees
  • Area rentals
  • Indirect taxes
  • Assumed terms by location - oil and gas

What's included

This report contains:

  • Document

    United Kingdom upstream fiscal summary

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