§ Mr. Ernie Rossasked the Chancellor of the Exchequer if he will take steps to eliminate the utilisation of offshore companies by the oil and service industries to avoid payment of taxation on their North Sea turnover, as described in the Scottish television documentary broadcast on Monday 25 May.
§ Mr. Peter Rees[pursuant to his reply, 1 June 1981, c. 265]: I do not think it would be either practicable or desirable to seek to eliminate non-resident companies from activities in the United Kingdom continental shelf. The Inland Revenue is, however, aware of possibilities for avoidance of tax, and is active in using its various powers, including section 485, Income and Corporation Taxes Act 1975, and section 38, Finance Act 1973, to counter this. So far as the oil industry itself is concerned, the tax rules and the licensing arrangements ensure that North Sea production profits fall within the United Kingdom tax charge.