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HMRC internal manual

Oil Taxation Manual

PRT: royalty - periodic payments

PRT Royalty was abolished with effect from 1 January 2003.

Periodic payments are fixed yearly amounts. They are generally linked to the acreage of the licence area and commence some time after the year in which the licence was granted. It is unlikely that fields in later licence rounds will in fact be taxable fields.

It should be noted that those fields that are non-royalty payers will still make periodic payments that can be included in a licence debit and credit computation as long as the licence round relevant to the field provides for the payment of these amounts.

In addition as these payments do not relate to production they can obviously be incurred in periods before production has commenced. When the first chargeable period is finally established (by reference to OTA75\S1(4)) all payments made from the inception of the licence will be allowable in the licence debit and credit computation.