The rate of PRT was reduced to 0% by Finance Act 2016 for chargeable periods beginning on or after 1 January 2016. This effective abolition of PRT is structured as a 0% tax to preserve companies’ ability to obtain PRT refund from carry back of decommissioning losses. Previously the rate was 50% for many years and had been expected to reduce to 35% from 1 January 2016 (as announced at Budget 2015) but this change was overtaken by Finance Act 2016.
PRT was introduced in 1975 and was levied on a field by field basis by reference to six-monthly chargeable periods ending on 30 June and 31 December each year.
Petroleum Revenue Tax was abolished for fields given development consent on or after 15 March 1993, but has continued to apply to older fields unless it could be demonstrated that no tax was likely ever to be paid.
Even though there will be no PRT liability in the future, there are still Petroleum Revenue Tax planning opportunities, mainly around the utilisation of PRT losses and tariffing. In addition, PRT administration has not been changed.
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