News

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 […]

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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. […]

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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 […]

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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. […]

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16 Apr 2020

Anti-avoidance Rules – an update

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 […]

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03 Apr 2020

Covid-19 – Tax and Fiscal Changes

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 […]

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27 Mar 2020

Finance Bill Commentary

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 […]

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19 Mar 2020

Covid-19

During these difficult times, we hope that all of our clients, contacts and colleagues are keeping well. All of our staff are now working from home on a regular basis. This is something we have been doing on a lesser scale for a number of years and we are confident that, for now, we are able to continue to provide the same level of service as normal. Most contact is by way of email but if you want to speak […]

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11 Mar 2020

Budget 2020

The Chancellor delivered Budget 2020 today. The Budget contained no significant changes to direct North Sea taxation and confirmed that RF rates would remain unchanged.  There was no announcement in respect of the transformational sector deal that had been included in the Conservative Manifesto. Announcements that may be of interest include: Confirmation that the main rate of corporation tax is to remain at 19 per cent, rather than reduced to 17% from 1 April 2020 as previously enacted. This is […]

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04 Feb 2020

Change in ownership – availability of carried forward trade losses

The anti-loss buying rules, where applied, deny companies under new ownership the benefit of carried forward unused tax losses in place at the date of change of ownership. They apply where there has been a major change in the nature or conduct of the (company’s) trade, or where, prior to the change in ownership, the scale of the activities in the trade has become small or negligible without any significant revival. Companies undertaking oil and gas exploration, appraisal and development […]

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