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HMRC internal manual

Oil Taxation Manual

PRT: oil allowance - late expenditure claims


This is anti-avoidance legislation designed to prevent participators reducing their PRT liabilities by deferring expenditure claims and thereby accelerating their use of oil allowance. Where Schedule 5 and 6 claims are delayed by more than more twelve months after the end of the claim period, oil allowance can be withdrawn under a Board’s direction.

If the deferred claim relates to a period which coincides with a safeguard period, a direction will not be made, though the expenditure may be disallowed under OTA75\S9A, see OT17750.

The acceleration of oil allowance (outside of safeguard) may also be counteracted by the deferral of assessments. This follows Amoco (UK) Exploration Co v CIR (57TC147, see OT04630).