Country Report

United Kingdom upstream fiscal summary

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All upstream projects in the UK are governed by concessions. Licences were awarded in regular rounds with fixed fiscal terms. However, after September 2022, 3 tests are performed to decide whether to hold the licensing rounds in the future to meet the climate change objectives. Over the years, the tax system has seen numerous changes, the most recent being in June 2023 with the introduction of a price floor for the Energy Profits Levy (EPL). The mature UK Continental Shelf features a progressive profit-based tax regime with no up-front taxes and generous capital uplifts. The key elements are the Ring Fence Corporation Tax (RFCT), Supplementary Charge (SC) and Energy Profits Levy (EPL).

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
    • Base
    • Income
    • Ded u ctions
    • Rate
    • Payment schedule
    • Supplementary Charge (SC)
    • Ring fencing
    • Rate
    • Payment schedule
    • Ring fencing
    • Base
    • 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

    PDF 1.06 MB