The Government announced last week that the UK will now not implement the EU Mandatory reporting rules (‘DAC6’) in full.  Instead the UK rules for the implementation of DAC 6 have been amended to require reporting of only a limited subset of the DAC6 list of reportable transactions. This subset broadly equates to the requirement in the OECD model for reporting, and HMRC have announced that the newly amended rules will, in due course, be superseded by a disclosure regime […]

Implementation of uncertain tax treatments notification is delayed until April 2022 The Government announced last week that the implementation of the new requirement for large businesses to notify HMRC of uncertain tax treatments will be delayed until April 2022.  The Government stated that the delay was to allow more time to get the policy and legislation right and to allow more time for businesses to prepare. This decision has been made following the recent consultation on the new proposals when […]

Mandatory reporting rules for certain types of transactions have been introduced by the UK, as required by the EU Directive on Administrative Cooperation, commonly called DAC6.  The obligation to report will fall mainly on “intermediaries”, i.e. broadly advisers, but in certain circumstances, the obligation will fall on the businesses themselves, and companies will therefore need to make sure they are complying with any obligations that exist for them. These rules came into force on 1 July 2020 and originally had […]

Premier and Chrysaor have announced that they are to merge, in a Press Release issued on 6 October 2020, with further details included in presentations published at the same time. The proposed merger remains subject to shareholder and stakeholder approvals and it is possible that further details may be included in the shareholder circular. Overview of the merger The main relevant features of the transaction are: Premier will acquire Chrysaor by issuing new Premier shares to Chrysaor’s existing shareholders;  The […]

An additional P & L hit? As set out in our news brief in November 2019, the IASB issued an exposure draft (ED) last summer which may have a significant impact on the level of deferred tax accounted for on decommissioning assets and liabilities for certain companies. The IASB interpretations committee recently met to discuss the feedback on this ED and they have recommended that the proposal is taken forward, but with one very important and for some unwelcome change. […]

A recent tax case has considered whether an oil and gas royalty interest held by a non-UK resident gave rise to ring-fence income and whether the relevant treaty allowed HMRC to tax the income. Whilst the case concerned the treatment of royalty receipts, the findings potentially have wider application. The Case Royal Bank of Canada (the Bank) had lent money to a Canadian oil company operating in the North Sea.  The Canadian company transferred its interest in the Buchan oil […]

The supplementary charge calculation requires the relevant financing items to be excluded from the ring-fence CT (RFCT) profits. The question of how this relatively simple concept operates where losses are being utilised has been in dispute since the levy was introduced in 2002. Industry has believed that the so-called “shadow” method, where RFCT losses adjusted for any financing elements could be carried forward and set against SC profits as they arose, was valid, following an agreement with HMRC in 2007. […]

Readers may recall previous newsletters (the last one being 4 February 2020) discussing HMRC’s view of the application of the anti-avoidance rules in Part 14 CTA 2010 which can deny the use of losses where there has been a change in a company’s ownership and a major change in the nature or conduct of a trade (the so-called MCINOCOT rules), or prior to the change of ownership the trade had become small or negligible. We are pleased to note that […]

Covid-19 – the currently announced tax and fiscal changes We thought it would be helpful to summarise the recently announced Government tax measures of most relevance to the UK upstream oil industry.  In addition, we highlight some tax issues that we think businesses should be considering in light of the much-changed business environment. PAYE, Corporation Tax and other taxes – Time to Pay scheme The Government signalled that businesses that are suffering financial hardship due to Covid-19 may be eligible […]

The Finance Bill was published last week alongside a number of new consultations. Finance Bill Non ring-fence corporation tax rate The Finance Bill included confirmation that the non ring-fence rate of corporation tax for the year to 31 March 2021 is to be 19 per cent.  The Bill also repeals the provisions in an earlier Finance Act that was to reduce the rate to 17 per cent and has included a provision that sets the non-ring fence rate of corporation […]