Finance Bill

House of Commons

Session 2008 - 09
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Finance Bill

Finance Bill
Schedule 44 — Supplementary charge: reduction for certain new oil fields
Part 8 — Interpretation
350

Qualifying oil fields
20
In this Schedule “qualifying oil field” means an oil field that is, on the
authorisation day—
(a)
a small oil field,
(b)
an ultra heavy oil field, or
5
(c)
an ultra high pressure/high temperature oil field.
Small oil field
21    (1)
In this Schedule “small oil field” means an oil field which has reserves of oil
of 3,500,000 tonnes or less.
      (2)
For the purposes of this paragraph and paragraph 24(2)—
10
(a)
the amount of reserves of oil which an oil field has is to be
determined on the authorisation day;
(b)
1,100 cubic metres of gas at a temperature of 15 degrees celsius and
pressure of one atmosphere is to be counted as equivalent to one
tonne.
15
Ultra heavy oil field
22    (1)
In this Schedule “ultra heavy oil field” means an oil field with oil at—
(a)
an API gravity below 18 degrees, and
(b)
a viscosity of more than 50 centipoise at reservoir temperature and
pressure.
20
      (2)
For that purpose API gravity, in relation to oil, is the amount determined by
the following calculation—

where G is the specific gravity of the oil at 15.56 degrees celsius.
Ultra high pressure/high temperature oil field
23
In this Schedule “ultra high pressure/high temperature oil field” means an
25
oil field with oil at—
(a)
a pressure of more than 1034 bar in the reservoir formation, and
(b)
a temperature of more than 176.67 degrees celsius in the reservoir
formation.
Total field allowance for new oil field
30
24    (1)
For the purposes of this Schedule, the total field allowance for a new oil field
is—
(a)
in the case of a small oil field, the amount determined in accordance
with sub-paragraph (2),
(b)
in the case of an ultra heavy oil field, £800,000,000, and
35
(c)
in the case of an ultra high pressure/high temperature oil field,
£800,000,000.
      (2)
The total field allowance for a small oil field is—

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Schedule 45 — Oil: miscellaneous amendments
351

(a)
if the oil field has reserves of oil of 2,750,000 tonnes or less,
£75,000,000, and
(b)
in any other case (where the oil field has reserves of more than
2,750,000 tonnes but not more than 3,500,000 tonnes), the following
amount— $equation: cross[string["\xa3 75,000,000"],over[plus[string["3,500,000"],minus[char[X]]],plus[string[ "3,500,000"],minus[string["2,750,000"]]]]]$
5

where X is the amount of the reserves of oil (in tonnes) which the oil
field has.
Other interpretation
25
In this Schedule—
“adjusted ring fence profits”, in relation to a company and an
10
accounting period, means the adjusted ring fence profits that would
(if this Schedule were ignored) be taken into account in calculating
the supplementary charge on the company under section 501A of
ICTA for the accounting period;
“authorisation day”, in relation to a new oil field, means the day when
15
development of the field is authorised;
“initial licensee”, in relation to a new oil field, means a company that is
licensee in the field on the authorisation day.
“licensee” has the same meaning as in Part 1 of OTA 1975;
“oil” has the same meaning as in Part 1 of OTA 1975;
20
“oil field” has the same meaning as in Part 1 of OTA 1975;
“relevant income”, in relation to a new oil field and an accounting
period of a company, means production income of the company
from any oil extraction activities carried on in the field that is taken
into account in calculating the company’s adjusted ring fence profits
25
for the accounting period.
Schedule 45
Section 90

Oil: miscellaneous amendments
OTA 1975
1     (1)
OTA 1975 is amended as follows.
30
      (2)
Omit paragraphs 9 and 10 of Schedule 3 (election to have amounts
mentioned in section 2(9)(b) and (c) spread).
      (3)
In consequence of the omission of paragraph 9 of Schedule 3, omit section
9(4).
      (4)
Omit paragraph 3 of Schedule 4 (allowable expenditure incurred before 13
35
November 1974).
      (5)
The repeals made by this paragraph have effect in relation to chargeable
periods beginning after 30 June 2009.

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Schedule 46 — Duties of senior accounting officers of qualifying companies
352

OTA 1983
2     (1)
OTA 1983 is amended as follows.
      (2)
Omit section 9(3) and paragraph 3 of Schedule 3 (receipts from contracts
made before 8 May 1982).
      (3)
In consequence of the omission of subsection (3) of section 9—
5
(a)
in subsection (2) of that section, for “subsections (3) and (4)”
substitute “subsection (4)”, and
(b)
in subsection (4)(b) of that section, for “subsections (1) to (3)”
substitute “subsections (1) and (2)”.
      (4)
Omit sections 13 and 14 and Schedule 5 (transitional provision for
10
expenditure incurred on or before 31 December 1983).
FA 1993
3     (1)
Schedule 20A to FA 1993 (as inserted by Part 1 of Schedule 33 to FA 2008) is
renumbered as Schedule 20B to that Act.
      (2)
In the following provisions, for “Schedule 20A” substitute “Schedule 20B”—
15
(a)
section 6(1A) of OTA 1975,
(b)
paragraph 15(9A) of Schedule 17 to FA 1980, and
(c)
section 185(1ZA)(b) of FA 1993.
ICTA
4     (1)
In section 502(3A) of ICTA (interpretation of Chapter 5 of Part 12), omit the
20
words from “but” to the end.
      (2)
The repeal made by this paragraph has effect on and after 22 April 2009.
Schedule 46
Section 92

Duties of senior accounting officers of qualifying companies
Main duty of senior accounting officer
25
1     (1)
The senior accounting officer of a qualifying company must take reasonable
steps to ensure that the company establishes and maintains appropriate tax
accounting arrangements.
      (2)
The senior accounting officer of a qualifying company must, in particular,
take reasonable steps—
30
(a)
to monitor the accounting arrangements of the company, and
(b)
to identify any respects in which those arrangements are not
appropriate tax accounting arrangements.
Certificate for Commissioners
2     (1)
The senior accounting officer of a qualifying company must provide the
35
Commissioners with a certificate for each financial year of the company.

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Schedule 46 — Duties of senior accounting officers of qualifying companies
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      (2)
The certificate must—
(a)
state whether the company had appropriate tax accounting
arrangements throughout the financial year, and
(b)
if it did not, give an explanation of the respects in which the
accounting arrangements of the company were not appropriate tax
5
accounting arrangements.
      (3)
The certificate must be provided—
(a)
by such means and in such form as is reasonably specified by an
officer of Revenue and Customs, and
(b)
not later than the end of the period for filing the company’s accounts
10
for the financial year (or such later time as an officer of Revenue and
Customs may have allowed).
      (4)
A certificate may relate to more than one qualifying company.
Notifying Commissioners of name of senior accounting officer
3     (1)
For each financial year a qualifying company must ensure that the
15
Commissioners are notified of the name of each person who was its senior
accounting officer at any time during the year.
      (2)
The notification must be given—
(a)
by such means and in such form as is reasonably specified by an
officer of Revenue and Customs, and
20
(b)
not later than the end of the period for filing the company’s accounts
for the financial year (or such later time as an officer of Revenue and
Customs may have allowed for providing the certificate for the
financial year under paragraph 2).
      (3)
A notification may relate to more than one qualifying company.
25
Penalty for failure to comply with main duty
4     (1)
This paragraph applies if a senior accounting officer fails to comply with
paragraph 1 at any time in a financial year.
      (2)
The senior accounting officer is liable to a penalty of £5,000.
      (3)
A person is not liable to more than one penalty under this paragraph in
30
respect of the same company and the same financial year.
Penalties for failure to provide certificate etc
5     (1)
This paragraph applies if a senior accounting officer—
(a)
fails to provide a certificate in accordance with paragraph 2, or
(b)
provides a certificate in accordance with that paragraph that
35
contains a careless or deliberate inaccuracy.
      (2)
The senior accounting officer is liable to a penalty of £5,000.
      (3)
For the purposes of this Schedule, an inaccuracy is careless if the inaccuracy
is due to a failure by the senior accounting officer to take reasonable care.
      (4)
An inaccuracy in a certificate that was neither careless nor deliberate when
40
the certificate was given is to be treated as careless if the senior accounting
officer—

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(a)
discovered the inaccuracy some time later, and
(b)
did not take reasonable steps to inform HMRC.
More than one senior accounting officer
6     (1)
This paragraph applies if the identity of the senior accounting officer of a
company changes.
5
      (2)
If (but for this sub-paragraph) more than one person would be liable to a
penalty under paragraph 4 in respect of a financial year of the company,
only the one who became the senior accounting officer latest in the year is
liable to such a penalty.
      (3)
If a person who is or has been the senior accounting officer of the company
10
complies, or purports to comply, with paragraph 2 in respect of a financial
year, no other person is liable to a penalty under paragraph 5 in respect of
that company and that financial year.
      (4)
A person who is replaced as the senior accounting officer of the company
before the last day for compliance with paragraph 2 in respect of a financial
15
year is not liable to a penalty under paragraph 5(1)(a) for failing to comply
with that paragraph in respect of that company and that financial year.
Penalty for failure to notify Commissioners of name of senior accounting officer
7
A qualifying company is liable to a penalty of £5,000 if, for a financial year,
the Commissioners are not notified of the name or names of its senior
20
accounting officer or officers in accordance with paragraph 3.
Reasonable excuse
8     (1)
Liability to a penalty for a failure to comply with this Schedule does not arise
if the senior accounting officer or qualifying company satisfies HMRC or (on
an appeal notified to the tribunal) the tribunal that there is a reasonable
25
excuse for the failure.
      (2)
For the purposes of this paragraph—
(a)
an insufficiency of funds is not a reasonable excuse unless
attributable to events outside the person’s control,
(b)
where the person relies on any other person to do anything, that is
30
not a reasonable excuse unless the first person took reasonable care
to avoid the failure, and
(c)
where the person had a reasonable excuse for the failure but the
excuse has ceased, the person is to be treated as having continued to
have the excuse if the failure is remedied without unreasonable
35
delay after the excuse ceased.
Assessment of penalties
9     (1)
Where a senior accounting officer or a qualifying company becomes liable
for a penalty under this Schedule—
(a)
HMRC may assess the penalty, and
40
(b)
if they do so, they must notify the officer or company liable for the
penalty.

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      (2)
An assessment of a penalty under this Schedule for a failure in respect of a
financial year, or an inaccuracy in a certificate for a financial year, may not
be made—
(a)
more than 6 months after the failure or inaccuracy first comes to the
attention of an officer of Revenue and Customs, or
5
(b)
more than 6 years after the end of the period for filing the company’s
accounts for the financial year.
      (3)
HMRC may not assess a person who is the senior accounting officer of a
company (“C”) as liable to a penalty under paragraph 4 or 5 for a financial
year (“the relevant financial year”) if—
10
(a)
at any time in the relevant financial year the person was the senior
accounting officer of another company that was a member of the
same group as C, and
(b)
HMRC has assessed the person as liable, as the senior accounting
officer of the other company, to a penalty under that paragraph for a
15
financial year that ends on a day in the relevant financial year.
      (4)
HMRC may not assess a company (“C”) as liable to a penalty under
paragraph 7 for a financial year (“the relevant financial year”) if—
(a)
C was a member of a group at the end of that year, and
(b)
HMRC has assessed another company that was a member of the
20
same group as C at that time as liable to a penalty under that
paragraph—
(i)
for its financial year ending on the same day as the relevant
financial year, or
(ii)
if its financial year does not end on that day, for its financial
25
year ending last before that day.
Appeal
10    (1)
A person may appeal against a decision of HMRC that a penalty is payable
by that person.
      (2)
Notice of an appeal must be given—
30
(a)
in writing,
(b)
before the end of the period of 30 days beginning with the date on
which the notification under paragraph 9 was issued, and
(c)
to HMRC.
      (3)
Notice of an appeal must state the grounds of appeal.
35
      (4)
On an appeal that is notified to the tribunal, the tribunal may confirm or
cancel the decision.
      (5)
Subject to this paragraph and paragraph 11, the provisions of Part 5 of TMA
1970 relating to appeals have effect in relation to appeals under this
Schedule as they have effect in relation to an appeal against an assessment
40
to income tax.
Enforcement of penalties
11    (1)
A penalty under this Schedule must be paid—
(a)
before the end of the period of 30 days beginning with the date on
which the notification under paragraph 9 was issued, or
45

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(b)
if a notice of appeal against the penalty is given, before the end of the
period of 30 days beginning with the date on which the appeal is
determined or withdrawn.
      (2)
A penalty under this Schedule may be enforced as if it were income tax
charged in an assessment and due and payable.
5
Power to change amount of penalties
12    (1)
If it appears to the Treasury that there has been a change in the value of
money since the last relevant date, they may by regulations substitute for the
sums for the time being specified in paragraphs 4, 5 and 7 such other sums
as appear to them to be justified by the change.
10
      (2)
In sub-paragraph (1), in relation to a specified sum, “relevant date” means—
(a)
the date on which this Act is passed, and
(b)
in relation to that sum, each date on which the power conferred by
that sub-paragraph has been exercised.
      (3)
Regulations under this paragraph do not apply to—
15
(a)
a failure that occurs in respect of a financial year of a company that
begins before the date on which they come into force, or
(b)
an inaccuracy in a certificate that was provided to HMRC in respect
of such a financial year.
Application of provisions of TMA 1970
20
13
Subject to the provisions of this Schedule, the following provisions of TMA
1970 apply for the purposes of this Schedule as they apply for the purposes
of the Taxes Acts—
(a)
section 108 (responsibility of company officers),
(b)
section 114 (want of form), and
25
(c)
section 115 (delivery and service of documents).
Meaning of “appropriate tax accounting arrangements”
14    (1)
“Appropriate tax accounting arrangements” means accounting
arrangements that enable the company’s relevant liabilities to be calculated
accurately in all material respects.
30
      (2)
“Accounting arrangements” includes arrangements for keeping accounting
records.
      (3)
“Relevant liabilities”, in relation to a company, means liabilities in respect
of—
(a)
corporation tax (including any amount assessable or chargeable as if
35
it were corporation tax),
(b)
value added tax,
(c)
amounts for which the company is accountable under PAYE
regulations,
(d)
insurance premium tax,
40
(e)
stamp duty land tax,
(f)
stamp duty reserve tax,
(g)
petroleum revenue tax,