§ Mr. Haywardasked the Chancellor of the Exchequer whether he intends to make any changes to the rules governing the valuation of North sea oil for petroleum revenue tax purposes.
§ Mr. Norman LamontYes. The Government recognise that the operation of the current law on PRT valuation is uncertain in the sort of oil market that we have today; and that this uncertainty creates problems for the industry. Accordingly, we propose to bring forward legislation in the next Finance Bill to put the valuation of oil for PRT purposes on a more certain and appropriate basis. At the same time, we intend to introduce a related measure to determine what will be the basis of PRT liabilities in the case of oil sold at arm's length on the Brent market, where the number of deals done can result in the same cargo of oil being sold many times over.
Such a measure is necessary if PRT revenue in these circumstances is not to be eroded. We propose to consult the industry on the detail of these proposed changes, further details of which are set out in a press notice which the Inland Revenue is issuing today. The new legislation will apply from 1 January 1987.