When can the responsible person appeal an HMRC expenditure decision under OTA 1975 Schedule 5 paragraph 5?

The responsible person may appeal in writing to HMRC within three years of the date the original claim was made. An appeal can be lodged if the total expenditure allowed is less than claimed, or if the allocation of shares among participators differs from those stated in the original claim.

Does lodging an appeal under Schedule 5 paragraph 5 suspend HMRC's decision?

No, lodging an appeal does not suspend or delay the effect of HMRC's decision. The amounts and shares as stated by HMRC in their notice continue to apply unless and until the appeal is resolved in the claimant's favour by the tribunal or through an HMRC review.

Can other participators join an appeal about expenditure share allocation?

Yes, where the appeal concerns the allocation of expenditure shares among participators, any participator in the relevant oil field is entitled to be a party to the appeal proceedings before the tribunal. This ensures all those affected by the reallocation have a voice in the outcome.

Can the tribunal make a decision that leaves participators worse off on appeal?

Yes, the tribunal has broad powers and may vary HMRC's original decision in any way it sees fit, even if the variation makes matters worse for some or all participators. An appeal therefore carries risk, as the tribunal is not limited to upholding or improving the appellant's position.

Oil Taxation Act 1975 Schedule 5 paragraph 5

Appeals

Schedule 5 paragraph 5 sets out the right of appeal when HMRC allows less expenditure than was claimed, or allocates different shares of expenditure among participators than those originally stated in the claim.

The responsible person may appeal in writing to HMRC within three years of making the claim if the amounts allowed are less than those claimed, or if the shares allocated among participators differ from those in the original claim.
Where the appeal concerns the allocation of shares among participators, any participator in the relevant oil field is entitled to be a party to the appeal proceedings before the tribunal.
An appeal may be abandoned at any time before it is formally notified to the tribunal, by the responsible person giving written notice to HMRC.
The tribunal has the power to vary HMRC's decision on appeal, even if the variation is not to the advantage of all or any of the participators in the oil field.

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