News

22 Jun 2022

Energy Profits Levy – draft legislation published for consultation

The Energy Profits Levy (EPL) draft legislation has now been published for consultation. The consultation period closes on 28 June 2022. We understand that it is intended to have EPL enacted before the Summer recess but that the EPL legislation will not be substantively enacted for accounting purposes before 30 June 2022. The comments below reflect the current draft, but we do not expect there to be much change given the compressed legislative timetable. As expected the EPL applies to […]

26 May 2022

Chancellor announces a new oil and gas tax charged at 25%

This afternoon the Chancellor announced the recently anticipated, following significant political pressure, tax rise on the profits of companies that produce oil and gas from the UK and UK Continental Shelf. It does not apply to other energy sector players, such as the producers of green energy, as had been predicted in the Press. Rather than increase the rates on existing taxes the Chancellor chose to introduce a new oil and gas tax called the Energy Profits Levy. The Energy […]

23 Mar 2022

Spring Statement 2022

The Chancellor delivered the Spring Statement 2022 today. Despite the speculation and calls for a windfall tax there was no announcement on any changes to the oil tax rates. Therefore, the rates will continue to be those currently enacted being 30% for ring fence corporation tax and 10% for the supplementary charge to corporation tax. In addition, there was no announcement on any changes to the calculation of profits chargeable to ring fence taxation. Neither was oil and gas taxation […]

14 Mar 2022

Scope of the ring-fence: Result of the appeal in the Royal Bank of Canada case

In August 2020 we published a newsletter on a First-tier Tribunal (‘FTT’) case that 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. That newsletter can be found here: https://cwenergy.co.uk/scope-of-the-ring-fence-royal-bank-of-canada-case As we reported at the time the taxpayer lost on both counts at the FFT and appealed. The appeal was heard by the Upper Tribunal (‘UT’) in December and the […]

09 Feb 2022

Proposed changes to taxation of profits for multinational groups – Pillar Two

In our newsletter in July 2021, we summarised and commented on the potential changes to the taxation of profits for multinational groups published by the OECD/G20. That newsletter can be found here https://cwenergy.co.uk/potential-changes-to-taxation-of-profits-for-multinational-groups The OECD issued a report at the end of December 2021 that sets out details on how Pillar Two rules are to be implemented (“Model Rules”). Pillar Two deals with the Global Anti-Base Erosion (“GloBE”) rules which provides for the introduction of a minimum corporate tax rate […]

25 Jan 2022

Notification of uncertain tax treatments – revised guidance

In our newsletter last year we summarised and commented on the proposed rules for the notification of uncertain tax treatments. That newsletter can be found here https://cwenergy.co.uk/notification-of-uncertain-tax-treatments-draft-legislation-published/ Since then the relevant statutory provisions have been included in Finance (No.2) Bill 2021-2022, and last week revised draft HMRC guidance was published, subject to a short period of consultation. The consultation will run to 1 February 2022. The big change in the Finance Bill was the omission of the notification requirement where […]

27 Oct 2021

Autumn Budget and Spending Review 2021

The Chancellor delivered the Autumn Budget and Spending Review 2021 today. We set out below the key announcements that apply to the corporate sector, although no new measures are of direct relevance to the oil and gas sector. Ring fence and supplementary charge to corporation tax rates Despite the rise in the main tax rate as discussed below, there was no specific announcement on any changes to the oil tax rates. Therefore, the rates will continue to be those currently […]

11 Aug 2021

Notification of uncertain tax treatments – draft legislation published

The Government is moving ahead with the introduction of new rules which require “large” businesses to report uncertain tax treatments. Draft legislation has been included within the recently published Finance Bill 2021-22. In this newsletter we summarise and comment on the proposed notification rules. Background The draft legislation was published alongside the summary of responses to the previous further consultation that opened in April. Draft HMRC guidance is expected in the “coming weeks”. In overview, the rules apply to corporation […]

26 Jul 2021

PRT subsidy rules

The recent First-tier Tribunal case of Perenco UK Ltd v HMRC determined that payments made by the user field owners under a transportation and processing agreement (TPA), in respect of the user field’s share of the owner’s capital expenditure did not amount to a subsidy for PRT purposes under Paragraph 8(1) of Schedule 3 OTA 1975. The case concerned payments made to Perenco, as the owner of the Dimlington terminal, by a number of user fields under various TPAs in […]

21 Jul 2021

Potential changes to taxation of profits for multinational groups

On 1 July 2021, a statement providing a framework for reform of the international tax rules was published by the OECD/G20. The statement has been approved by 132 countries. A comprehensive agreement is to be finalised by October 2021 with changes coming into effect in 2023. The statement was short in detail (it was only 5 pages long), however, we set out below what is understood to be the current intention for how this reform (described as a two-pillar approach) […]