Finance Act 2009

Petroleum revenue tax U.K.

17 U.K. OTA 1975 is amended as follows.

18 (1) The Table in paragraph 1(1) of Schedule 2 (applying provisions of TMA 1970 in relation to management and collection of petroleum revenue tax) is amended as follows. U.K.

(2) In the entry relating to section 33 of TMA 1970, in the second column, for the entry relating to subsection (1) substitute “In subsection (1), for “year of assessment” substitute “ chargeable period ”.”

(3) Omit the entries relating to sections 34 and 36 of TMA 1970.

19 U.K. In paragraph 10 of Schedule 2 (assessments to tax and determinations of loss etc), after sub-paragraph (1) insert—

“(1A) An assessment under sub-paragraph (1) may be made at any time not more than 4 years after the end of the chargeable period to which it relates (subject to paragraphs 12A and 12B).”

20 (1) Paragraph 12 of Schedule 2 (further assessments and determinations) is amended as follows. U.K.

(2) After sub-paragraph (1) insert—

“(1A) An assessment (or an amendment of an assessment) under sub-paragraph (1) may be made at any time not more than 4 years after the end of the chargeable period to which the assessment relates (subject to sub-paragraph (1B) and paragraphs 12A and 12B).

(1B) The time limits in sub-paragraph (1A) and paragraphs 12A and 12B do not apply to an amendment of an assessment where the amendment is made in consequence (directly or indirectly) of—

(a) the granting of relief under section 7(2) or (3) to any participator for allowable losses accruing in any chargeable period, or

(b) a notice of variation served under paragraph 9 of Schedule 5 on any responsible person in respect of a claim for any claim period.”

(3) In sub-paragraph (2)—

(a) omit “(notwithstanding anything in section 34 of the Taxes Management Act 1970 (ordinary time limit for assessment))”,

(b) for “six years” substitute “ 4 years ”, and

(c) insert at the end “(subject to paragraphs 12A and 12B)”.

21 U.K. In paragraph 12A(1) of Schedule 2 (time limit for assessment following extension of time for delivery of return), for “five years” substitute “ 4 years ”.

22 U.K. In that Schedule, after paragraph 12A insert—

“12B (1) In a case involving a relevant situation brought about carelessly by a participator (or a person acting on behalf of a participator), an assessment (or an amendment of an assessment) under this Schedule on the participator may be made at any time not more than 6 years after the end of the relevant chargeable period (subject to sub-paragraph (2)).

(2) In a case involving a relevant situation brought about deliberately by a participator (or a person acting on behalf of a participator), an assessment (or an amendment of an assessment) on the participator may be made at any time not more than 20 years after the end of the relevant chargeable period.

(3) “Relevant situation” means a situation in which—

(a) there is a loss of tax,

(b) the assessable profit charged to tax by or stated in an assessment for a chargeable period ought to be or to have been larger,

(c) the allowable loss stated in an assessment or a determination of loss for a chargeable period ought to be or to have been smaller, or

(d) an assessment to tax should have been made for a chargeable period but was not made.

(4) “Relevant chargeable period” means—

(a) in the case of a further assessment under paragraph 12(2), the chargeable period in which the excessive allowable loss accrued, and

(b) in any other case, the chargeable period to which the assessment relates.

(5) Where the participator carried on a trade or business with one or more other persons at any time in the chargeable period for which the assessment under sub-paragraph (1) or (2) is made, an assessment to tax in respect of the profits of that trade or business may also be made on any of the participator's partners.

(6) In determining the amount of the tax to be charged on a person for a chargeable period in an assessment in a case mentioned in sub-paragraph (1) or (2) (including an assessment under sub-paragraph (5)), effect must be given to any relief or allowance to which that person would have been entitled for that period if a valid claim or application had been made.

(7) Sub-paragraph (6) only applies if the person on whom the assessment is made so requires.

(8) Subsections (5) to (7) of section 118 of the Taxes Management Act 1970 (losses and situations brought about carelessly or deliberately) apply for the purposes of this paragraph as they apply for the purposes of that Act.

(9) In subsection (6)(b) of that section (as it applies for the purposes of this paragraph), the reference to the person who provides the information has effect as if it included any person who becomes the responsible person for the oil field after the information is provided.”

23 (1) Paragraph 2 of Schedule 5 (allowance of expenditure other than abortive exploration expenditure: claim period) is amended as follows. U.K.

(2) In sub-paragraph (1), for “six years” substitute “ 4 years ”.

(3) In sub-paragraph (7)—

(a) in paragraph (c), for “four years” substitute “ 2 years ”, and

(b) in the words after that paragraph, for “six years” substitute “ 4 years ”.

24 (1) Paragraph 9 of Schedule 5 (allowance of expenditure other than abortive exploration expenditure: notice of variation) is amended as follows. U.K.

(2) In sub-paragraph (1)—

(a) omit the words from “, within” to “field,”,

(b) for “in the notice” substitute “ in a notice of a decision under paragraph 3 above given to the responsible person for an oil field ”, and

(c) for “that period” substitute “ the permitted period ”.

(3) Omit sub-paragraphs (1A) to (1C) and (2A).

(4) After sub-paragraph (2A) insert—

“(2B) In this paragraph “permitted period” means the period of 4 years beginning with the date on which the notice of the decision under paragraph 3 was given (but see sub-paragraph (2C)).

(2C) Where the relevant amount was overstated in the notice of decision as a result of an inaccuracy in a statement or declaration made by the responsible person (or a person acting on behalf of the responsible person) in connection with the claim—

(a) if the inaccuracy was careless, the permitted period is extended to 6 years, and

(b) if the inaccuracy was deliberate, the permitted period is extended to 20 years.”

(5) Omit sub-paragraph (11).

(6) Insert at the end—

“(12) For the purposes of this section, an inaccuracy in a statement or declaration made by the responsible person (or a person acting on behalf of the responsible person) is careless if it is due to a failure by the person to take reasonable care.

(13) An inaccuracy in a statement or declaration made by the responsible person (or a person acting on behalf of the responsible person) is to be treated as careless if—

(a) the responsible person, the person who acted on behalf of the responsible person or any person who becomes the responsible person for the oil field after the statement or declaration is made discovers the inaccuracy some time after it is made, and

(b) that person fails to take reasonable steps to inform Her Majesty's Revenue and Customs.”

25 (1) Schedule 6 (allowance of expenditure (other than abortive exploration expenditure) on claim by participator) is amended as follows. U.K.

(2) In paragraph 1(2) (claim period), for “six years” substitute “ 4 years ”.

(3) In paragraph 2 (applying provisions of Schedule 5), in the Table, in the entry relating to paragraph 9 of Schedule 5, omit the words in the second column.

26 U.K. In paragraph 1(3) of Schedule 7 (allowance of abortive exploration expenditure), in the Table, in the entry relating to paragraph 9 of Schedule 5, in the second column omit—

(a) the words “In sub-paragraph (1C) omit paragraph (c)” and “omit sub-paragraph (2A)”, and

(b) the words from “and in sub-paragraph (11)” to the end.