The National Audit Office (NAO) published the results of its investigation into oil and gas decommissioning costs on 25 January, concluding that government estimates of a £24bn total cost to taxpayers have a wide scope of uncertainty.
In the report, the NAO outlined the falling level of tax receipts from the basin, with much expenditure now highly tax deductible. In 2016-17, the government paid out more to oil and gas operators in tax relief than it received in revenues, resulting in repayments totalling £290mn. The Office for Budget Responsibility projects net annual receipts from the oil and gas sector to recover slightly, rising from £1.2bn in 2017-18 to a projected £2.4bn in 2022-23.
HMRC now plans to start publishing the total combined cost of decommissioning tax reliefs in January 2019.