Taxation (International and Other Provisions) Act 2010 Schedule 7

Relocation of section 38 of, and Schedule 15 to, FA 1973 (paragraphs 1–10)

Schedule 7, Part 1 relocates and re-enacts provisions that make holders of petroleum licences secondarily liable for unpaid tax assessed on non-UK residents carrying out activities on the UK continental shelf.

• Where a non-UK resident is assessed to tax on profits or gains from UK continental shelf activities under a petroleum licence and fails to pay within 30 days, HMRC may serve a secondary-liability notice on the licence holder requiring them to pay the outstanding tax plus interest.
• Where the assessed tax relates to more than one licence, or only partly relates to a licence, the licence holder's liability is apportioned by a formula based on the share of profits or gains attributable to that licence.
• HMRC may issue an exemption certificate to a licence holder where it is satisfied the non-UK resident will meet their tax obligations; while in force, the licence holder cannot be served with a secondary-liability notice, and even after cancellation the holder's liability is reduced to exclude profits arising during the exemption period.
• Licence holders must provide HMRC, on request, with details of licence-related transactions, payments and the persons to whom those payments are made, and any amount paid under a secondary-liability notice is not deductible for tax purposes but may be recovered from the assessed person.

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