Energy (Oil and Gas) Profits Levy Act 2022 section 20

Counteracting tax advantage involving qualifying levy losses

Section 20 provides an anti-avoidance rule that allows HMRC to counteract any levy advantage obtained through arrangements designed to exploit qualifying levy losses in a contrived or artificial manner.

• Any levy advantage arising from qualifying levy losses connected to disqualifying arrangements must be counteracted through just and reasonable adjustments.
• Arrangements are disqualifying if a main purpose is to obtain a levy advantage through qualifying levy losses, and the arrangements are contrived, abnormal, lack genuine commercial purpose, or circumvent the intended limits of relief.
• A levy advantage includes obtaining relief, repayment, reduction, deferral, or avoidance of the Energy Profits Levy or any assessment or obligation to account for it.
• Adjustments to counteract the advantage can be made by assessment, modification of an assessment, amendment or disallowance of a claim, or by any other appropriate means.