What does section 11 of the Oil Taxation Act 1975 do?

Section 11 extends the Provisional Collection of Taxes Act 1968 to cover petroleum revenue tax. This allows HMRC to collect PRT on a provisional basis immediately after the House of Commons passes a resolution, without waiting for the Finance Act to receive Royal Assent. It achieves this by inserting petroleum revenue tax into the 1968 Act's list of covered taxes.

Why is provisional collection of petroleum revenue tax necessary?

Under normal parliamentary procedure, a tax only has full legal force once the Finance Act receives Royal Assent, which can take several months after the Budget. Provisional collection prevents taxpayers from rearranging their affairs to avoid forthcoming PRT changes during the gap between the Budget announcement and the Finance Act becoming law.

How does provisional collection of PRT work in practice after a Budget announcement?

When the Chancellor announces PRT changes in a Budget, and the House of Commons passes a resolution approving them, the changes take immediate legal effect on a temporary basis. HMRC can begin collecting PRT at the new rate straight away, even though the Finance Act may not receive Royal Assent for several months afterwards.

How does section 11 amend the Provisional Collection of Taxes Act 1968?

Section 11 amends section 1(1) of the Provisional Collection of Taxes Act 1968 by inserting 'petroleum revenue tax' after 'income tax' in the list of taxes to which the provisional collection power applies. This formal amendment gives PRT the same provisional collection treatment as income tax under United Kingdom law.

Oil Taxation Act 1975 section 11

Application of Provisional Collection of Taxes Act 1968

Section 11 applies the Provisional Collection of Taxes Act 1968 to petroleum revenue tax, allowing the tax to be collected on a provisional basis following a House of Commons resolution before the relevant Finance Act is formally passed.

The Provisional Collection of Taxes Act 1968 is extended to cover petroleum revenue tax.
This means PRT can be collected immediately after a Commons resolution, without waiting for the Finance Act to receive Royal Assent.
The mechanism provides legal authority for HMRC to collect PRT on a provisional basis during the parliamentary process.
The 1968 Act is formally amended by inserting "petroleum revenue tax" into its list of covered taxes alongside income tax.

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member