Oil Taxation Act 1975

• (1) In a case involving a relevant situation brought about carelessly by a participator (or a person acting on behalf of a participator), an assessment (or an amendment of an assessment) under this Schedule on the participator may be made at any time not more than 6 years after the end of the relevant chargeable period (subject to sub-paragraph (2) and (2A) ).

• (2) In a case involving a relevant situation brought about deliberately by a participator (or a person acting on behalf of a participator), an assessment (or an amendment of an assessment) on the participator may be made at any time not more than 20 years after the end of the relevant chargeable period.

• (2A) In a case involving a relevant situation brought about by arrangements which were expected to give rise to a tax advantage in respect of which a participator (or a person acting on behalf of a participator) was under an obligation to notify the Board under section 253 of the Finance Act 2014 (duty to notify Commissioners of promoter reference number) but failed to do so, an assessment (or an amendment of an assessment) on the participator may be made at any time not more than 20 years after the end of the relevant chargeable period.

• (3) “Relevant situation” means a situation in which—

• (a) there is a loss of tax,

• (b) the assessable profit charged to tax by or stated in an assessment for a chargeable period ought to be or to have been larger,

• (c) the allowable loss stated in an assessment or a determination of loss for a chargeable period ought to be or to have been smaller, or

• (d) an assessment to tax should have been made for a chargeable period but was not made.

• (4) “Relevant chargeable period” means—

• (a) in the case of a further assessment under paragraph 12(2), the chargeable period in which the excessive allowable loss accrued, and

• (b) in any other case, the chargeable period to which the assessment relates.

• (5) Where the participator carried on a trade or business with one or more other persons at any time in the chargeable period for which the assessment under sub-paragraph (1) , (2) or (2A) is made, an assessment to tax in respect of the profits of that trade or business may also be made on any of the participator's partners.

• (6) In determining the amount of the tax to be charged on a person for a chargeable period in an assessment in a case mentioned in sub-paragraph (1) , (2) or (2A) (including an assessment under sub-paragraph (5)), effect must be given to any relief or allowance to which that person would have been entitled for that period if a valid claim or application had been made.

• (7) Sub-paragraph (6) only applies if the person on whom the assessment is made so requires.

• (8) Subsections (5) to (7) of section 118 of the Taxes Management Act 1970 (losses and situations brought about carelessly or deliberately) apply for the purposes of this paragraph as they apply for the purposes of that Act.

• (9) In subsection (6)(b) of that section (as it applies for the purposes of this paragraph), the reference to the person who provides the information has effect as if it included any person who becomes the responsible person for the oil field after the information is provided.

Claim for relief for overpaid tax etc

13A

• (1) This paragraph applies where—

• (a) a participator has paid an amount by way of tax but believes that the tax was not due, or

• (b) a participator has been assessed as liable to pay an amount by way of tax but believes that the tax is not due.

• (2) The participator may make a claim to the Commissioners for Her Majesty's Revenue and Customs (“HMRC”) for repayment or discharge of the amount.

• (3) Paragraph 13B makes provision about cases in which HMRC are not liable to give effect to a claim under this paragraph.

• (4) Paragraphs 13C to 14I make further provision about making and giving effect to claims under this paragraph.

• (5) Paragraph 13F makes provision about the application of this paragraph and paragraphs 13B to 13E to amounts paid under contract settlements.

• (6) HMRC are not liable to give relief in respect of a case described in sub-paragraph (1)(a) or (b) except as provided—

• (a) by this Schedule (following a claim under this paragraph), or

• (b) by or under another provision of the Oil Taxation Acts.

• (7) For the purposes of this paragraph and paragraphs 13B to 13F, an amount paid by one person on behalf of another is treated as paid by the other person.

• (8) In this paragraph and paragraphs 13B to 13F, “the Oil Taxation Acts” means—

• (a) Parts 1 and 3 of this Act,

• (b) the Oil Taxation Act 1983, and

• (c) any other enactment relating to petroleum revenue tax.

Cases in which HMRC not liable to give effect to a claim

13B

• (1) HMRC are not liable to give effect to a claim under paragraph 13A if or to the extent that the claim falls within a case described in this paragraph.

• (2) Case A is where the amount paid, or liable to be paid, is excessive by reason of—

• (a) a mistake in a claim, election or notice or a nomination under Schedule 10 to FA 1987, or

• (b) a mistake consisting of making or giving, or failing to make or give, a claim, election or notice or a nomination under Schedule 10 to FA 1987.

• (3) Case B is where the participator—

• (a) has or could have sought relief by making a claim for expenditure to be allowed under section 3 or 4 (allowance of expenditure), or

• (b) is or will be able to seek relief by taking other steps under the Oil Taxation Acts.

• (4) Case C is where the participator—

• (a) could have sought relief by taking such steps within a period that has now expired, and

• (b) knew, or ought reasonably to have known, before the end of that period that such relief was available.

• (5) Case D is where the claim is made on grounds that—

• (a) have been put to a court or tribunal in the course of an appeal by the participator relating to the amount paid or liable to be paid, or

• (b) have been put to HMRC in the course of an appeal by the participator relating to that amount that is treated as having been determined by a tribunal (by virtue of paragraph 14(9) (settling of appeals by agreement)).

• (6) Case E is where the participator knew, or ought reasonably to have known, of the grounds for the claim before the latest of the following—

• (a) the date on which an appeal by the participator relating to the amount paid, or liable to be paid, in the course of which the ground could have been put forward (a “relevant appeal”) was determined by a court or tribunal (or is treated as having been so determined),

• (b) the date on which the participator withdrew a relevant appeal to a court or tribunal, and

• (c) the end of the period in which the participator was entitled to make a relevant appeal to a court or tribunal.

• (7) Case F is where the amount in question was paid or is liable to be paid—

• (a) in consequence of proceedings enforcing the payment of that amount brought against the participator by HMRC, or

• (b) in accordance with an agreement between the participator and HMRC settling such proceedings.

• (8) Case G is where—

• (a) the amount paid, or liable to be paid, is excessive by reason of a mistake in calculating the participator's liability to tax, and

• (b) liability was calculated in accordance with the practice generally prevailing at the time.

• (9) Case G does not apply where the amount paid, or liable to be paid, is tax which has been charged contrary to EU law.

• (10) For the purposes of sub-paragraph (9), an amount of tax is charged contrary to EU law if, in the circumstances in question, the charge to tax is contrary to—

• (a) the provisions relating to the free movement of goods, persons, services and capital in Titles II and IV of Part 3 of the Treaty on the Functioning of the European Union, or

• (b) the provisions of any subsequent treaty replacing the provisions mentioned in paragraph (a).

Making a claim

13C

• (1) A claim under paragraph 13A may not be made more than 4 years after the end of the relevant chargeable period.

• (2) In relation to a claim made in reliance on paragraph 13A(1)(a), the relevant chargeable period is—

• (a) where the amount paid, or liable to be paid, is excessive by reason of a mistake in a return or returns under paragraph 2 or 5, the chargeable period to which the return (or, if more than one, the first return) relates, and

• (b) otherwise, the chargeable period in respect of which the amount was paid.

• (3) In relation to a claim made in reliance on paragraph 13A(1)(b), the relevant chargeable period is —

• (a) where the amount liable to be paid is excessive by reason of a mistake in a return or returns under paragraph 2 or 5, the chargeable period to which the return (or, if more than one, the first return) relates, and

• (b) otherwise, the chargeable period to which the assessment relates.

• (4) A claim under paragraph 13A must be in such form as the HMRC may prescribe.

Decision on claim

13D

HMRC must—

• (a) make a decision on the claim, and

• (b) by notice inform the participator of their decision.

Assessment of claimant in connection with claim

13E

• (1) This paragraph applies where—

• (a) a claim is made under paragraph 13A,

• (b) the grounds for giving effect to the claim also provide grounds for making an assessment or determination under paragraph 10 or 12, or an amendment of such an assessment or determination, on the participator in respect of any accounting period, and

• (c) such an assessment, determination or amendment could be made but for the expiry of a time limit in paragraph 10(1A), 12(1A), 12A or 12B.

• (2) Where this paragraph applies—

• (a) the time limit does not apply, and

• (b) the assessment, determination or amendment is not out of time if it is made before the final determination of the claim.

• (3) A claim is not finally determined until it, or the amount to which it relates, can no longer be varied (whether on appeal or otherwise).

Contract settlements

13F

• (1) In paragraph 13A(1)(a) the reference to an amount paid by a participator by way of tax includes an amount paid by a person under a contract settlement in connection with tax believed to be due.

• (2) Sub-paragraphs (3) to (6) apply if the person who paid the amount under the contract settlement (“the payer”) and the person from whom the tax was due (“the taxpayer”) are not the same person.

• (3) In relation to a claim under paragraph 13A in respect of that amount—

• (a) the references to the participator in paragraph 13B(5) to (7) (Cases D, E and F) have effect as if they included the taxpayer,

• (b) the reference to the participator in paragraph 13B(8) (Case G) has effect as if it were a reference to the taxpayer, and

• (c) the reference to the participator in paragraph 13E(1)(b) has effect as if it were a reference to the taxpayer.

• (4) Sub-paragraph (5) applies where the grounds for giving effect to a claim by the payer in respect of the amount also provide grounds for making an assessment or determination under paragraph 10 or 12, or an amendment of such an assessment or determination, on the taxpayer in respect of any chargeable period.

• (5) HMRC may set any amount repayable to the payer by virtue of the claim against any amount payable by the taxpayer by virtue of the assessment, determination or amendment.

• (6) The obligations of HMRC and the taxpayer are discharged to the extent of any set-off under sub-paragraph (5).

• (7) “Contract settlement” means an agreement made in connection with any person's liability to make a payment to HMRC under or by virtue of an enactment.

Transfers of interests in oil fields: post-transfer decommissioning expenditure

11A

• (1) This paragraph applies if—

• (a) there is, for the purposes of Schedule 17 to FA 1980, a transfer by a participator in an oil field of the whole or part of an interest in the field, and

• (b) on or after 1 November 2018, the OGA gives consent for the transfer.

• (2) Paragraph 8(1) (certain subsidised expenditure to be disregarded) does not apply to any decommissioning expenditure that—

• (a) is incurred by the new participator, and

• (b) has been, or is to be, met directly or indirectly out of a payment made by the old participator.

• (3) Sub-paragraph (4) applies if, at the end of the transfer period, the old participator is no longer a licensee or a participator in respect of any licensed area wholly or partly included in the oil field.

• (4) Decommissioning expenditure that is incurred by the old participator, after the end of the transfer period, is to be treated for the purposes of this Act as having been incurred by the new participator (and paragraph 8(1) does not apply to any such expenditure).

• (5) If the old participator has transferred the whole or part of another interest in the oil field to the new participator, but the condition in sub-paragraph (1)(b) was not met in respect of the transfer, references in sub-paragraphs (2) and (4) to decommissioning expenditure are references to such proportion of that expenditure as is just and reasonable.

• (6) In this paragraph—

• (a) “decommissioning expenditure” means—

• (i) expenditure that is incurred, in relation to the oil field mentioned in sub-paragraph (1)(a), for a purpose within section 3(1)(i) or (j) (decommissioning or restoration), and

• (ii) is allowable under that section;

• (b) “the old participator”, “the new participator” and “the transfer period” have the same meaning as in Schedule 17 to FA 1980 (see paragraph 1(3) of that Schedule).

• (7) If there is, for the purposes of Schedule 17 to FA 1980, a subsequent transfer of the whole or part of an interest in the oil field mentioned in sub-paragraph (1)(a), references in this paragraph to “the old participator” include references to each participator whose interest, or part of it, in the oil field is the subject of a transfer to which this paragraph applies.