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HMRC internal manual

Oil Taxation Manual

Capital Allowances: Research and Development Allowances: Treatment of Payments for Production Licences

Payments for production licences do not qualify for RDA because the primary purpose of acquisition of a production licence is to get petroleum. This treatment was agreed with UKOITC for SRAs in the discussions in 1967.

Any research & development involved is merely a preliminary and ancillary step to the acquisition of the licence. It is accepted that these costs qualify under MEA.