Corporation Tax Act 2010 section 540

Election to treat notional income as arising in instalments

Section 540 allows a company, including a joint venture company, to elect to spread the notional income arising from the oil activities entry charge over a number of instalments rather than recognising it all at once.

• A company subject to the ring fence entry charge on its oil activities income may elect to treat that notional income as arising in equal annual instalments.
• The election must be made to an officer of Revenue and Customs within the required time limit.
• This instalment treatment applies equally to joint venture companies that fall within the entry charge provisions.
• The election, once made, allows the company to manage the tax impact of the entry charge by spreading it over the instalment period rather than bearing it in a single accounting period.