Last year’s Budget saw the ‘effective abolition’ of petroleum revenue tax (‘PRT’), which had previously applied to certain oil and gas fields on the UK continental shelf. Rather than abolishing the tax entirely, the PRT rate was reduced to zero per cent, largely in order to ensure that participants were still able to carry back losses arising through decommissioning. As a result, though, various administrative requirements under the regime continued to apply.
Following an industry consultation earlier this year, the government announced in today’s Autumn Statement that:
- The process for opting out of the PRT regime is being significantly simplified, so that participators will now be able to opt out simply by making an election to do so to HMRC. The election is effective in relation to the next chargeable period, and can be made any time from today to allow participators to opt out before the chargeable period beginning 1 January 2017.
- For those who do choose to remain in the regime, reporting requirements that have become irrelevant as a result of the 0% rate have been removed for the current chargeable periods and all future periods.
The draft legislation, explanatory notes and policy paper relating to the opting out process can be found here. The removal of the reporting requirements is described in the technical note, which can be found here.