HC Deb 13 July 1982 vol 27 cc980-2

13A.—(1) If a participator in an oil field has an excess of APRT credit for the last of the chargeable periods referred to in section 134(1)(b) of this Act, then, on the making of a claim the amount of that excess shall be repaid to him.

(2) For the purposes of this paragraph there is an excess of APRT credit for the last of the chargeable periods referred to in subsection (1)(b) of section 134 of this Act if any of that credit would, apart from this paragraph, fall to be carried forward to the next chargeable period in accordance with subsection (4) of that section; and the amount of the excess is the amount of the credit which would fall to be so carried forward.

(3) A claim under sub-paragraph (1) above shall be made not earlier than two months after the expiry of the last chargeable period referred to in that sub-paragraph.

(4) In any case where—

  1. a claim is made under sub-paragraph (1) above before an assessment is made for the chargeable period referred to in that sub-paragraph, and
  2. (b) the APRT credit for that period exceeds the amount of tax which, in the statement delivered under section 1(1)(a) of the Petroleum Revenue Tax Act 1980, is shown to be payable by the participator concerned in accordance with the Schedule to that Act for that period in respect of the oilfield in question, the amount of the excess shall be repaid to the participator and that repayment shall be regarded as a payment on account of any amount which may fall to be repaid to him by virtue of sub-paragraph (1) above.

(5) Paragraph 10(4) above shall not apply to any amount of APRT which is repayable only on the making of a claim under sub-paragraph (1) above.

(6) Amounts repaid to a participator by virtue of this paragraph shall be disregarded in computing his income for the purposes of income tax or corporation tax.'.

Mr. Deputy Speaker

With this we may take Government amendments Nos. 143 and 144.

Mr. Wakeham

The amendments complete the package of modifications to the Budget oil taxation proposals announced by the Chancellor on 9 June. The other proposals were implemented by amendments in Committee.

The effect of the amendments is to advance the time at which APRT that cannot be set off against PRT is repaid. Under the Budget proposals that would have been the end of field life; it will now be five years after the first payment. That will help the less profitable fields that pay APRT but little or no PRT.

At the same five-year point, amendments passed in Committee will cut off all future liability to APRT. That should provide a substantial protection for less profitable fields.

The amendments are proof of the fact that we take account of representations made by the oil industry. We find it extremely helpful when companies back up their representations with detailed figures about particular projects. I am extremely grateful to companies that have supplied information. We do a great of analytical work in Government on the figures that we have. We look at existing fields and we look at our best ideas of what future developments will be like. We looked very carefully at the field profiles that were prepared by the joint Government—UKOOA review of marginal fields a couple of years ago, but inevitably the details of actual projects under consideration are known to the companies alone.

I hope that in the forthcoming discussions with UKOOA about the tax regime companies will feel able to support their arguments with chapter and verse about individual projects.

Mr. Eggar

This is an important point relating to the evidence the will be given. Can my hon. Friend give us assurances that talks will be held not only with the industry body, UKOOA, but with individual companies about individual fields and that the talks will be held at a suitably high level with the Inland Revenue, if necessary with Treasury Ministers being present?

Mr. Wakeham

I give my hon. Friend that assurance and I add the comment that any information will be treated in the strictest confidence.

Mr. Peter Hardy (Rother Valley)

The Minister is on an important point. This is the eighth or ninth set of changes in the fiscal regime. Is he saying that until recent months or weeks the oil companies had failed to give the Treasury information that might have prevented the Government from making some of the incautious changes that were made a year or two ago?

Mr. Wakeham

I reject the hon. Gentleman's implied criticisms of the regime. There is much change and uncertainty in the oil world, and that is likely to continue for the foreseeable future. We are making sure that we get as close to the oil companies as we can. I do not complain about past co-operation; there has been a great deal, but I shall be writing to UKOOA on the review that my right hon. and learned Friend the Chancellor agreed with the association recently on some of the problems of the marginal fields and I shall urge that the oil companies be as forthcoming as possible, in the interests of getting a sensible tax regime for both the country and the companies.

Mr. Straw

We discussed the principle behind the amendments at length in Committee, but I have one question for the Minister of State. If he cannot answer it now, perhaps he will write to me. How many fields are the changes likely to help, compared with the previous regime?

Mr. Wakeham

For the sake of accuracy, it would be better if I wrote to the hon. Gentleman.

Amendment agreed to.

Amendments made:

No. 142, in page 213, line 40 at end insert— '(1A) For the purpose of determining whether the new participator is liable to pay an amount of APRT, but for no other purpose, subsection (1) of section 134 of this Act shall apply as if any gross profit which at any time before the transfer had accrued to the old participator from the field had accrued at that time to the new participator or, if the transfer is of part of the old participator's interest in the field, as if a corresponding part of that gross profit had at that time accrued to the new participator.'.

No. 143, in page 215, line 15 at end insert 'and (c) the date stated in that decision as the date on which the winning of oil from the field ceased is earlier than the expiry of the last of the chargeable periods specified in section 134(1)(b) of this Act.'.

No. 144 in page 215, line 16 leave out 'paid any amount of APRT' and insert 'an amount of APRT credit'.—[Mr. Wakeham]

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