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HMRC internal manual

Oil Taxation Manual

PRT: tax-exempt tariffing receipts - operation of transitional provision

A participator is required by OTA83\S10 to include full details of its share of any tariff receipts of the field in its return for that field (OT15010). Where the transitional provision applies tariffs that would otherwise be tax-exempt tariffing receipts are chargeable tariff receipts and must be included in the return.

In order to provide certainty for companies as to whether amounts received are tariff receipts or tax-exempt tariffing receipts it will be necessary for the participator and LB Oil & Gas to agree the “qualifying threshold” in respect of the user field. Most claims for expenditure incurred during the transitional period will have been claimed contemporaneously so it should be possible to determine the “qualifying threshold”. Where claims have been deferred the expenditure incurred will be known by the participator and the “qualifying threshold” should be agreed on a provisional basis by reference to the expenditure likely to be allowed on a claim.