09 Apr 2021

Uncertain tax treatment by large businesses – second consultation opened

HMRC published a summary of responses to the first consultation and opened a second consultation to invite further views on the potential regime ahead of a proposed implementation from April 2022; any responses should be provided by 1 June 2021. Background In March last year, HMRC published a consultation document asking for views on the introduction of a notification requirement in respect of uncertain tax treatments for large businesses (i.e. those businesses which are in scope of the Senior Accounting […]


29 Mar 2021

Finance Bill 2021

The Finance Bill 2021 was published on 11 March 2021.  We set out below our comments on the key provisions that may affect oil and gas companies. Decommissioning Overview The Finance Bill includes amendments to clarify and expand the circumstances where expenditures on decommissioning plant and machinery may qualify for the special capital allowance relief for ring fence companies. The changes are aimed at expenditures incurred at a time where formal approval of an abandonment programme has not yet been […]


03 Mar 2021

Budget 2021

The Chancellor delivered Budget 2021 today.  We set out below the key announcements that apply 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 enacted being 30% for ring fence corporation tax and 10% for the supplementary charge to corporation tax. […]


06 Jan 2021

DAC6 Mandatory reporting rules replaced

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in the OECD model for reporting, and HMRC have announced that the newly amended rules will, in due course, be superseded by a disclosure regime […]


17 Nov 2020

Uncertain Tax Treatments Notification delayed

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 […]


28 Oct 2020

DAC 6 Mandatory reporting rules – the obligations for businesses

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 […]


15 Oct 2020

What does the recently announced proposed Premier/Chrysaor merger tell us?

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 […]


23 Sep 2020

Changes in accounting for deferred tax on decommissioning assets and liabilities

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. […]


25 Aug 2020

Scope of the ring fence: Royal Bank of Canada case

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 […]


27 May 2020

New HMRC view of how losses can be utilised for supplementary charge purposes

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. […]