The spectre of volatility in North Sea tax receipts trotted out by Alistair Darling as the oil and gas bogey-man can clearly be demonstrated to be mostly down to George Osbornes ineptitude in understanding business. If you tax me for making an increased profit across my wide-ranging business to an extent which is greater than the profit margin of parts of that business I will then mothball those areas of my business which have become loss-making overnight due to your taxation. If then as an incentive to ramp up my production to earlier levels you offer me a tax break to allow me to make internal expenditure then naturally a lot of money destined for taxation will be redirected into my business as capital expenditure. You cant have it both ways. Tax receipts from North Sea production are down because George Osborne is a babe in the woods and he didnt have the depth of understanding to contemplate the causality of his precipitate actions.
Posted on: Tue, 26 Aug 2014 09:15:25 +0000
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