Paul Winfrow (PW) Chairman UKOITC
Jacqui Akinlosotu (JA) ENI
Gordon Dennis (GD) UKOITC
Mike Manderson (MM) UKOITC
Stewart Norman (SN) OTAC
Phil Greatrex (PRG) CW Energy
Malcolm Phelps (MP) LBS Oil and Gas
Mike Crabtree (MC) LBS Oil and Gas
Paul Philip (PP) LBS Oil and Gas
Diane Williams (DW) LBS Oil and Gas
Andrew Parrock (AP) LBS Oil and Gas
Robert Douglas (RD) H M Treasury
Russell Malloch (RM) Local Compliance Glasgow
Chris Waterton
Peter Gunn
Ray Casanove
Alan Tume
Tony Chanter
MP welcomed everyone to the meeting and following this formal introductions were made.
MP welcomed Paul Winfrow as the new UKOITC Chairman.
The minutes of the last meeting held on the 24 October 2007 were agreed.
There were no points arising.
RD reported the present position on the consultation document issued in December following the review of the North Sea fiscal regime. This was accompanied by draft legislation to be discussed at a separate meeting arranged for next week with UKOITC.
The formal deadline for comments to be taken on board is the end of January. After that date we would do what we could but there could be no guarantees.
MC said there were two areas where draft legislation had not been issued with the Condoc – Gas Injection and 'Never-Payers'. Gas injection required another week or so and MC would be in contact. On 'never-payers' there was agreement in principle but there were some potentially awkward questions for example on the Human Rights Aspects for past participators and the details of Tariff receipts allowances.
MC said the main potential problem areas, while relatively easily understood, required careful thought to resolve and avoid major damage to basic tax principles such as transferability of losses from one company to another. At present it is likely to be preferable to get the consequences of the changes to the North Sea Fiscal regime right and leave the change of use aspects until later. Even if they miss this year’s Finance Bill, MC assured Industry that the issues were still viewed as very important and that they would be carried forward.
AP has previously been in liaison with industry on how LPG Values are calculated. At the panel meeting on the UKOITC subcommittee it was agreed that AP could be directly contacted by individuals to avoid potential handling problems. AP reported that this has not yet happened. MP said that the ball was now in Industry’s court. It was beginning to look unlikely that any revised arrangements would be in place for 1H 2008.
Action Point: Industry needed to speak to AP with a view towards getting the Category 1 valuation regulations amended in summer 2008. (Subsequently AP had met with PW and discussed this matter; PW would take action from his position as Chair of UKOITC, and work jointly with AP to move things forward as fast as possible).
PRT2: MP gave an update on the PRT2 return the last exchange was a request for industry to report back to Oil and Gas of which we are still awaiting a reply.
AP stated that we need PRT2 to be able to calculate the Tariff Rates Allowance and suggested if this could be cut down to one page.
PW said that some non-operators still relied upon the PRT2 to see how much oil they had sold, so UKOITC would have to speak to non-operators as well to get a complete picture from industry’s perspective.
PRT1A: It is LBS Oil and Gas view that PRT1As are still necessary for all Category 2 fields.. Industry asked whether PRT1As were needed for fields producing Category 2 (that is, single crude fields not connected to pipeline systems) oil IF all sales were at arm’s-length?
Action Point: Industry to write to HMRC with their ideas, HMRC to think around this issue.
There are no open issues.
MP gave an update on the LBS Geographical Restructuring Population Project and confirmed that letters explaining the changes have now been written and sent to all customers. The businesses which are proposed to move to LC Glasgow are now expected to be made by April 2008. RM reported that businesses dealt with in Glasgow with ring-fence profits would find that they had two tax references (retaining the '349' Oil and Gas reference) for a little while to ensure that Ring Fence CT was properly assessed. A permanent fix was expected in the Autumn.
There were no significant issues brought forward.
MP referred to the current position on data security and apologised for any inconvenience while HMRC reviewed its policies and practices. One consequence is that Shared workspace is currently unavailable as a security upgrade is needed. The service is currently scheduled to be restored on the 12 of February 2008 and it should be available for PRT e-filing in February.
MP handed out information on the three levels of security to which HMRC would now work. MP said If there were any concerns to let him know.
LBS are expected to meet the targets set out in the Varney Review, which includes treating 40 per cent of businesses as low risk by April 2008. Other targets are settling 70 per cent of issues that are over six months old at the 31 March 2007by the 31 March 2008 and a 75 per cent decrease in the number of small open issues by the April 2008.
MP reported that previously LBS Oil and Gas were a little behind targets with older and smaller issues, but have since made considerable progress and, working closely with customers, were now just ahead of the targets. MP said that internally he was reporting the position as remaining as Amber rather than Green.
MP thanked everyone for working together towards meeting the business targets. CRM’s had reported to him that they had either held risk review meetings or had them planned very shortly and will have told customers where we view them as low risk.
MC referred to the Review of Links and stated that when new legislation came out we would try and have full guidance out much earlier. This went beyond the normal explanatory notes and was the material that ended up in the Oil Taxation Manual. MP said LBS Oil and Gas will continue to share draft guidance with industry.
The Annual Conference is to take place on the 5 November 2008 at Somerset House. For the year after due to the number of people attending and the potential loss of Somerset House we may need to consider booking another venue. DW had agreed to look after this year’s event and invited Industry to offer nominees
MP handed out copies of feedback for the 2007 event and went through some of the points made. Overall the feedback received was very positive. MP said he would circulate the feedback with the minutes.
MP referred to a letter Dave Hartnett’s officer had issued to the Chairmen of FTSE 100 companies relating to OECD paper on the Role of Tax Intermediaries. PW reported that they were aware of the study. MP would send a link with the meeting minutes (below).
Action Point: Link to be added.
The next meeting is scheduled to take place on Wednesday 23 April 2008.
