Corporation Tax Act 2010 section 356NA

Restriction on hire: further provision

Section 356NA makes further provision about the hire cap restriction on oil contractor ring fence profits, including Treasury powers to amend the relevant percentage, relief for disallowed amounts, and an anti-avoidance rule.

• The Treasury may make regulations to change the "relevant percentage" used to calculate the hire cap under section 356N or section 285A, with flexibility to make different provision for different cases
• Where hire payments exceed the cap and cannot be included in the contractor's ring fence profit calculation, the excess may be deducted from the contractor's other total profits or surrendered to group companies as if it were a trading loss under group relief rules
• No such deduction or surrender is permitted against the contractor's own ring fence profits or against ring fence profits of oil producers under Part 8 of the Act
• A targeted anti-avoidance rule applies: if an associated person enters into arrangements where a main purpose is to circumvent the hire cap restriction, the restriction applies as if those arrangements had not been made