PRT: tariff and disposal receipts: qualifying tariff receipts referable to different periods - example 2
Example 2: Calculation of TRA: Straddling and ‘Normal’ Tariff Receipts
The treatment of the straddling receipt is as in example 1. In CP3 there are also ‘normal’ tariff receipts of £6m relating to 250,000 metric tonnes of different oil.
Calculate TRA by reference to notional straddling receipt of CP3 and normal tariff receipts:
A = £15m + £6m = £21m
B = 250,000 metric tonnes
C = 1,500,000 + 250,000 = 1,750,000 metric tonnes
TRA cash equivalent (AxB/C) is therefore:
£21m (A) x (250,000 (B)/1,750,000 (C)) = £3m
Then deduct TRA on notional straddling receipt in CP3, i.e. £2.5m
TRA due for ‘normal’ tariff receipts is therefore £0.5m (£3m - £2.5m).