OT17780 - PRT: Safeguard - Deferred Expenditure Claims - Example 3

Example 3: Utilisation of Oil Allowance (using PRT rate of 50% for illustrative purposes)

A company鈥檚 safeguard capital base is 拢300m. Its final period of safeguard is 1H01.

The 1H01 assessment is as follows:

Gross Profit: 拢30m

Oil Allowance: 拢20m

Safeguard: 拢10m*

PRT: 拢0m

*15% of 拢300m is greater than 拢30m (the adjusted profit) so no PRT is due.

On 28 February 2002, a claim of 拢20m operating expenditure is submitted relating to the claim period 1H01.

If this claim had been allowed before the making of the 1H01 assessment, the assessment would have shown:

Gross Profit: 拢30m

Operating Expenditure: 拢20m

Safeguard: 拢10m

PRT: 拢0m

The deferred claim will be disallowed. However, the oil allowance that the participator would not have used had the claim been allowed before the making of the 1H01 assessment - cash equivalent 拢10m (拢20m x 50%) - is made available for future field use. The1H01 assessment is not amended.