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HMRC internal manual

Oil Taxation Manual

Oil contractors ring fence: calculating the hire cap: total expenditure

There are two elements to the recognised expenditure to which the relevant percentage is applied in order to determine the hire cap:

  • original cost OT50040 
  • enhancement cost OT50042.

These values are calculated as at the beginning of each accounting period. But see the following pages for assets which are altered or acquired during an accounting period.