Corporation Tax Act 2010 section 330ZA

Ordering of allowances

Section 330ZA allows oil and gas companies that hold allowances under more than one type of supplementary charge relief to choose the order in which those allowances are applied against their ring fence profits.

• Three types of allowance can reduce the supplementary charge on ring fence profits: investment allowance, onshore allowance, and cluster area allowance.
• Where a company holds allowances under more than one of these categories, it may choose the order in which they are applied for any accounting period.
• When a particular allowance is applied, the "adjusted ring fence profits" it reduces are calculated after taking into account any allowances the company has chosen to apply before it, but ignoring those applied after it.
• This flexibility enables companies to manage their allowances strategically, for example by using up an allowance that is closer to expiry before drawing on another.