Oil Taxation Act 1975 section 5B

Allowance of research expenditure

Section 5B provides for the allowance against petroleum revenue tax of general research expenditure that is not tied to a specific oil field, where the research relates to activities in the United Kingdom and its continental shelf.

• Qualifying research expenditure must have been incurred on or after 17 March 1987, must not relate to a particular oil field, and must not have become allowable under other provisions within three years of being incurred.
• The research must be of a type that would have been allowable as field expenditure had it been carried out in connection with a specific field, and it must have been incurred wholly or partly for United Kingdom purposes.
• Where research expenditure serves both UK and non-UK purposes, only the portion that can be fairly and reasonably attributed to UK purposes qualifies for the allowance.
• No allowance is given under this section to the extent that the expenditure has already been relieved under other schedules, or where the expenditure relates to excluded oil or non-taxable fields.