When can HMRC amend a petroleum revenue tax assessment under Schedule 2 paragraph 12 of the Oil Taxation Act 1975?

HMRC may amend a PRT assessment when the assessable profit was stated too high or too low, an allowable loss was incorrectly calculated, the wrong type of assessment or determination was issued, or it becomes apparent that an assessment or loss determination should have been made when none was originally issued.

What is the time limit for HMRC to correct a PRT assessment under paragraph 12?

The general time limit is 4 years after the end of the chargeable period to which the assessment relates. However, paragraphs 12A and 12B may extend this deadline. Where corrections arise from loss relief, overpaid tax claims, or expenditure claim variations, no time limit applies at all.

How does the time limit work when excessive loss relief was carried back to an earlier period?

Where an earlier period's assessable profit was understated because an excessive loss from a later period was set against it, HMRC has 4 years from the end of the chargeable period in which the allowable loss accrued to make a further assessment, potentially giving a longer correction window.

Must HMRC notify the participator when amending an assessment under paragraph 12?

Yes, whenever HMRC makes or amends an assessment or determination under paragraph 12, it must give notice to the participator concerned. The same notification rules, appeal rights, and related procedures that apply to original assessments and determinations under paragraph 10 also apply to amendments.

Oil Taxation Act 1975 Schedule 2 paragraph 12

Assessments to tax and determinations of loss, etc.

Schedule 2 paragraph 12 gives the Board (HMRC) the power to correct assessments and loss determinations for petroleum revenue tax when the original figures turn out to be wrong, and sets out the time limits within which those corrections must be made.

The Board may amend assessments or loss determinations where the assessable profit or allowable loss was stated too high or too low, or where the wrong type of assessment or determination was issued.
Corrections must generally be made within 4 years after the end of the chargeable period to which the assessment relates, though extended time limits may apply under paragraphs 12A and 12B.
The normal time limits do not apply where an amendment is needed as a consequence of loss relief being granted, a claim for overpaid tax, or a notice of variation of expenditure claims.
Where an assessable profit was understated because an excessive loss from a later period was set against it, the Board has 4 years from the end of the period in which the loss accrued to make a further assessment.

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