biffer Posted September 3, 2014 Share Posted September 3, 2014 Can someone answer a question for me? How does the value of oil translate into tax revenue? When there's say, £100 billion of oil, what's the amount of that money which goes into the taxman specifically for the oil? I'm not interested in Corporation tax and subsidiary taxes at the mo, I know these can massively increase the worth of the industry, I just want to understand how oil extraction relates to oil income for the government. Quote Link to comment Share on other sites More sharing options...
Auld_Reekie Posted September 3, 2014 Share Posted September 3, 2014 I think the only money they make is from licences to drill/extract and corporation tax. And that's really it I think. There is nothing else. Vast majority is from corporation tax from what I understood. Quote Link to comment Share on other sites More sharing options...
biffer Posted September 3, 2014 Author Share Posted September 3, 2014 Having done a wee bit digging, there's a bit more than that I think. https://www.gov.uk/government/publications/statistics-of-government-revenues-from-uk-oil-and-gas-production Petroleum Revenue Tax, Corporation tax which is treated in a very specific way and a supplementary charge which seems to have replace royalties about twenty years ago. Quote Link to comment Share on other sites More sharing options...
perthTam Posted September 3, 2014 Share Posted September 3, 2014 I think the only money they make is from licences to drill/extract and corporation tax. And that's really it I think. There is nothing else. Vast majority is from corporation tax from what I understood. Is there not a petroleum revenue tax too per barrel of oil? The taxes they pay will also have an allowance for spend on rigs/pipes/drilling etc. that reduces the amount of tax per barrel once field comes into production. So probably no two fields pay exactly the same tax rate..... Quote Link to comment Share on other sites More sharing options...
Auld_Reekie Posted September 3, 2014 Share Posted September 3, 2014 Aye, fair point. Quote Link to comment Share on other sites More sharing options...
Orraloon Posted September 3, 2014 Share Posted September 3, 2014 It is far, far too complicated for any Scottish person to understand. We are not genetically programmed to understand such things which is why we have leave this sort of stuff to the folk at Westminster. Quote Link to comment Share on other sites More sharing options...
fishcumnock Posted September 3, 2014 Share Posted September 3, 2014 I'm astonished at that quote !!! Quote Link to comment Share on other sites More sharing options...
Clyde1998 Posted September 3, 2014 Share Posted September 3, 2014 I'm astonished at that quote !!! I can't tell if it was sarcasm or not... Quote Link to comment Share on other sites More sharing options...
biffer Posted September 3, 2014 Author Share Posted September 3, 2014 (edited) It is far, far too complicated for any Scottish person to understand. We are not genetically programmed to understand such things which is why we have leave this sort of stuff to the folk at Westminster. So, tell us how it works then, I genuinely want to understand this as both sides quote their figures in different units. One side talks about the value of oil left, the other about the value to the exchequer. I'd like to understand how to relate the two. Because I want to be able to highlight the pish that's coming from Westminster. Edited September 3, 2014 by biffer Quote Link to comment Share on other sites More sharing options...
Orraloon Posted September 3, 2014 Share Posted September 3, 2014 So, tell us how it works then, I genuinely want to understand this as both sides quote their figures in different units. One side talks about the value of oil left, the other about the value to the exchequer. I'd like to understand how to relate the two. Because I want to be able to highlight the pish that's coming from Westminster. https://www.gov.uk/oil-and-gas-taxation Quote Link to comment Share on other sites More sharing options...
Ally Bongo Posted September 3, 2014 Share Posted September 3, 2014 More importantly will the mainstream media be reporting this later http://www.oilandgaspeople.com/news/1039/scottish-west-coast-untapped-oil-and-gas-reserves-worth-trillions/ Quote Link to comment Share on other sites More sharing options...
biffer Posted September 3, 2014 Author Share Posted September 3, 2014 More importantly will the mainstream media be reporting this later http://www.oilandgaspeople.com/news/1039/scottish-west-coast-untapped-oil-and-gas-reserves-worth-trillions/ But what does that mean in terms of national income? Quote Link to comment Share on other sites More sharing options...
Hairy Pete Posted September 3, 2014 Share Posted September 3, 2014 A rule of thumb its worth around $10 per barrel to the gov spread across all the fields. The companies buy the original exploration licence for the block in a tender situation initially for $x millions. The corporation tax is paid back in the country where the HQ and many cross charge support like HR / IT /Corporate infrastructure to run divisions at a loss. The actual cost for the North Sea is based on $55 per barrel compared to the middle east which is $5 per barrel. That's why when the barrel drops down to $80 ish the North Sea projects get put on hold. Quote Link to comment Share on other sites More sharing options...
euan2020 Posted September 3, 2014 Share Posted September 3, 2014 It's not just about the tax either its the infrastructure - part of the $55 per barrel will go to local service companies, who then spend the money locally, where more tax is, and more infastructure drips down to the taxi driver, hairdresser etc etc etc Aberdeen is now a centre of excellence - so even without Oil in the North Sea there would still be folk in the North East involved in the Oil Industry taking back money to spend there. Joke in the Oil Industry, that people i know/meet dont realise Aberdeen is only 240,000 given the amount of Aberdonians they meet Quote Link to comment Share on other sites More sharing options...
biffer Posted September 4, 2014 Author Share Posted September 4, 2014 Yeah, I know there is a huge amount of support industry work, but I want to make the connection between "there's X billion pounds left" and "that'll raise Y billion in tax" Cheers HP that helps Quote Link to comment Share on other sites More sharing options...
perthTam Posted September 4, 2014 Share Posted September 4, 2014 Biffer, Some interesting thoughts about how the oil predicted to be on the west coast of Scotland is far too low at the moment West Coast Oil It will only last 100 years now ....... how will we manage? Quote Link to comment Share on other sites More sharing options...
biffer Posted September 4, 2014 Author Share Posted September 4, 2014 Biffer, Some interesting thoughts about how the oil predicted to be on the west coast of Scotland is far too low at the moment West Coast Oil It will only last 100 years now ....... how will we manage? Already seen it. I'm wanting to be able to explain to people how much of the value of that oil translates to cash to the treasury. Quote Link to comment Share on other sites More sharing options...
Orraloon Posted September 4, 2014 Share Posted September 4, 2014 https://www.pressandjournal.co.uk/fp/business/north-of-scotland/334681/stock-market-analysts-back-salmond-on-oil/ Quote Link to comment Share on other sites More sharing options...
Ally Bongo Posted September 5, 2014 Share Posted September 5, 2014 (edited) Sir Ian Wood now saying only 15 years of Oil left, 2 days after Oil and Gas people stated that it really could be over 100 years http://www.telegraph.co.uk/news/uknews/scottish-independence/11046740/Sir-Ian-Wood-15-years-of-oil-left-before-independent-Scotland-spending-cuts.html Edit -I really should start looking at the dates of articles So that makes him look an even bigger fraud Edited September 5, 2014 by Ally Bear Quote Link to comment Share on other sites More sharing options...
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