Oil Taxation Act 1983 Schedule 3 paragraph 3

Supplement on expenditure incurred after the end of the claim period

Schedule 3 paragraph 3 deals with the calculation of an uplift (supplement) on certain qualifying oil field expenditure where that expenditure is allowed for a chargeable period ending after the claim period for the field has closed.

• Where qualifying expenditure is allowed for a chargeable period that ends after the claim period, the participator may be entitled to an additional supplement on that expenditure when computing assessable profits or allowable losses.
• The supplement is calculated by reference to the number of complete half-years falling between the date the expenditure was incurred and the end of the chargeable period for which it is allowed, subject to a maximum period.
• The rate used to calculate the supplement is applied to the qualifying expenditure for each complete half-year in the relevant period, giving the participator additional relief that recognises the time value of money between spending and the period of allowance.
• Following amendment by Finance Act 2009, the provisions were updated to align the supplement calculation with wider changes to petroleum revenue tax administration and assessment periods.

---