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HMRC internal manual

Oil Taxation Manual

Capital allowances: extended ring fence expenditure supplement for onshore activities - accounting periods


The company’s accounting periods for the purposes of the ERFES are defined as follows.

Commencement period

The commencement period is the accounting period in which the company sets up and commences its ring fence trade.

Post-commencement period

A post-commencement period is any accounting period ending on or after 5 December 2013

  1. which is the commencement period, or
  2. that ends after the commencement period.

Pre-commencement period

A pre-commencement period is any accounting period ending

  1. on or after 5 December 2013, and
  2. before the commencement period.

Exceptionally, a company may start to carry out activities before it has an accounting period for tax purposes (CTA2009\S9). If a company incurs any expenditure but is not within the charge to corporation tax, it is treated for ERFES purposes as if those activities were carried on in a trade. The company is then treated as having accounting periods commencing from the date on which that deemed trade started.

Straddling period

A straddling period of a qualifying company is an accounting period beginning before and ending on or after 5 December 2013. The part of the straddling period that falls before 5 December 2013 and the part that falls after that date are treated as separate accounting periods for ERFES purposes.