What does section 4 of the Energy (Oil and Gas) Profits Levy Act 2022 do?

Section 4 amends the overview provision in section 270 of the Corporation Tax Act 2010 by inserting a cross-reference to the Energy (Oil and Gas) Profits Levy Act 2022. This ensures that anyone consulting Part 8 of CTA 2010, which deals with the taxation of oil activities, is directed to the separate Energy Profits Levy legislation that applies to ring fence profits.

Does section 4 change any tax rates or calculations for oil and gas companies?

No. Section 4 is a housekeeping measure that does not alter any taxpayer's liability or change any computational rules. Its sole purpose is to act as a signpost within the Corporation Tax Act 2010, alerting readers that the Energy Profits Levy may also apply to companies engaged in UK oil and gas extraction alongside ring fence corporation tax and the supplementary charge.

Why was a cross-reference to the Energy Profits Levy inserted into the Corporation Tax Act 2010?

When Parliament introduced the Energy Profits Levy in 2022, it created a new tax charge sitting alongside existing ring fence corporation tax and supplementary charge in Part 8 of CTA 2010. The cross-reference was inserted into the Part 8 overview so that accountants and tax advisers reviewing oil activities taxation are reminded to also consult the 2022 Act.

Which section of the Corporation Tax Act 2010 is amended by this provision?

Section 270 of the Corporation Tax Act 2010 is amended. Section 270 provides an overview of Part 8, which covers the taxation of oil activities. The amendment adds wording at the end of subsection (1) stating that Part 8 must now be read alongside the Energy (Oil and Gas) Profits Levy Act 2022, which imposes a tax on ring fence profits.

Energy (Oil and Gas) Profits Levy Act 2022 section 4

Cross-reference to the Energy Profits Levy in existing corporation tax legislation

Section 4 amends the Corporation Tax Act 2010 to add a signpost directing readers to the Energy (Oil and Gas) Profits Levy Act 2022, ensuring that anyone consulting the oil activities provisions is aware of the additional levy on ring fence profits.

Part 8 of the Corporation Tax Act 2010 deals with the taxation of oil activities and contains an overview section (section 270).
This paragraph inserts a note into that overview making clear that Part 8 must now be read alongside the Energy (Oil and Gas) Profits Levy Act 2022.
The Energy Profits Levy is a separate tax that applies to ring fence profits — that is, profits from oil and gas extraction activities in the UK and on the UK Continental Shelf.
The amendment does not change any tax rates or calculations; it simply ensures readers are directed to the new levy legislation when reviewing the existing oil activities rules.

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