Chris Gautrey (CG) - ConocoPhillips - UKOITC
Phil Greatrex (PG) - CW Energy - Brindex
Adam Cran (AC)- Shell
Fernando Esteve (FE) - BG
Malcolm Phelps (MP) - LBS Oil and Gas
David Cooper (DC) - LBS Oil and Gas
Mike Crabtree (MC) - LBS Oil and Gas
Ray Casanove (RC) - LBS Oil and Gas
Ruth Bulteel (RB) - LBS Oil and Gas
Claire Roebuck (CR) - LBS Oil and Gas (minutes)
Russell Malloch (RM) - Local Compliance, Glasgow
Jonathan Bates (JB) - Large Business and Employers Customer Unit
Rob Douglas (RD) -H M Treasury
Chris Waterton -Maersk Oil
Peter Gunn - Newfield Exploration Company
Agustin Rivara -UKOOA
John Mawson - LBS Oil and Gas
Tony Chanter - LBS Oil and Gas
All attendees introduced themselves.
MP opened the meeting by welcoming RD and the Forum congratulated RD on his promotion to Jo Wakeman’s old role.
The Forum was happy for the minutes from the last meeting (19 October 2006) to be published on the internet. CG had asked that a statement should be included with the minutes stating they were prepared by HMRC; MP confirmed that this would be the case. MP will detail where the minutes are published on the internet in a list of links to relevant documents and within the minutes themselves. MP confirmed that prior to the minutes being uploaded to the internet a link to the Review of Links with Large Business would be added at point 4.
HMT’s response to the carbon capture and storage consultation was raised at the last meeting. A summary of responses to the CCS consultation is available.
The PBR announcement for the oil and gas sector was discussed. RD confirmed that the Treasury are still taking on board the views raised in the very constructive discussion process in relation to the Review of the North Sea fiscal regime. There are no conclusions to be shared yet. Treasury are looking to undertake some follow up meetings to explore further some of the points raised during the discussions, and are happy to meet with any other industry representatives who have more views they want to share.
MC thanked CG for agreeing to set up a working group; CG reported that there had been a considerable amount of interest in the group but the brief is very much focused on the current tax rules rather than changing the regime. Industry expressed its disappointment at the terms of reference for the working group and in particular the lack of any commitment to change the law to prevent the tax system acting as a deterrent to such investments. MC responded by saying that the group would first need to establish where the current legislation takes us, why the tax system may not work and what needs to be done to make it work; the working group is currently a scoping exercise. Ideas generated by the working group will of course be put to Treasury (RD), although industry can of course make its own representations as normal. The next stage is for examples to be put to the group; MC’s paper is nearly complete.
Action point: MC to prepare bullet point examples for CG to take to the UKOIT meeting on Friday.
The size of the working group may be more than the five members originally suggested. MC voiced his concern that if the group was too big it could be unwieldy. Once MC’s paper has been issued and considered by industry, the working group will be taken forward by seeing who would like to be involved and how it should be developed. On timescales, MC hoped the group will be able to substantially complete its work by the summer.
JB commented that this work ties in with themes in the Varney review on making the UK a good place to do business.
This was announced in the PBR. CG has not considered the detailed legislation yet but believes there is an issue regarding the timing of unrelieved losses on abandonment in that cessation does not take place until abandonment has been approved and the DTI have issued a note of the cessation. Industry will write a letter to LBS Oil and Gas detailing these concerns. There is also a further issue regarding tariffs and tariff receipts allowance for re-commissioned fields; industry believe it is anomalous that tariffs from re-commissioned fields are not automatically classified as TETRs. A meeting will be scheduled to address these concerns.
The guidance has been released to industry for comment, HMRC has received general suggestions but if detailed comment is to be made by industry, the deadline for responses is 23 January. The regulations will be published following industry’s reply.
The PRT forms for submission of returns for the chargeable period ending 31 December 2006 onwards have been changed; PRT2 forms have been emailed to the Responsible Persons and those present confirmed they had received them. There have been some technical hitches but once these are resolved the forms will appear on the internet.
The deregulatory effort on non PRT paying fields is progressing well. Tony Chanter and Gordon Dennis have exchanged the necessary information. CG has a few questions regarding the deadline which companies will need to apply by for the new regime. The Forum recorded their thanks to the team who have worked to develop this product.
Action point: HMRC to respond on timing for inclusion
CG said industry is currently analysing this topic and will be writing to HMRC shortly. MC will be arranging a meeting in February to discuss SC losses. There are other issues regarding capital gains and transitional rules where HMRC were also expecting a response from industry. Industry was unaware that any response on CGT issues was awaited.
Action point: DC to check the papers and identify where the perception of a response from industry came from. MC to write to industry.
CG reported that there is a group working on this which has met with HMRC. MC informed the Forum that Neville Howlett had visited a few months ago to discuss accounting issues and penalties with MC and colleagues in HMRC (CT and VAT). Neville is discussing the EU ETS further with DEFRA. Concerns were raised over the tax treatment of the voluntary purchase of quotas.
A partial response has been issued from the review; the roles and responsibilities of the Large Business Service Sector Leaders and CRMs have been published on the internet. Further detailed responses will follow in the coming months.
JB gave a high level view of the outcomes and implementation of the review.
A number of concerns were discussed, for example when does the 18 months start for settling transfer pricing enquiries. JB informed the Forum that various projects have been started which will look at the outcomes in greater detail. MP will attach a link to the document summarising the roles of CRMs and Sector Leaders and how issues might be escalated. MP would be interested in comments from Forum members. One area already in hand is that MP and other sector leaders have a responsibility to actively manage the resolution of tax enquires that are unsettled after 18 months.
JB reported that reactions to the report have been positive and the department is committed to making it work.
PG enquired about the authority of CRMs in relation to Technical specialists. The protocol involving CRMs has been well developed; it is accepted that CRMs are a single point of responsibility, although it is a transitional process at present. If there are problems on the ground then the CRM should be the first point of contact; the CRM will then refer issues up if need be. The CRM does not have responsibility for HMRC’s line on particular technical issues and cannot overrule decisions. However they can help co-ordinate HMRC’s views, speed up the process and ensure that any blockages are cleared.
CG gave RM a letter from Derek Leith, from Ernst and Young. RM responded by saying that he will take the issue of communications back to his office. The letter will be useful in pushing for open email access. A protocol has been set up (cleared by HMRC solicitors) that will enable emails to be exchanged. RM said that this did not apply generally in Local Compliance. MP said that using email would help to address the communications issues and he hoped the protocol would be used more widely.
The letter also raised concern over technical queries raised by Glasgow. RM needs to know the specific cases mentioned in the letter prior to being able to look into the concerns raised. PG commented that there were initially some issues with HMRC Glasgow due to the staff not having much oil and gas experience but these have decreased, however PG felt that there was a different approach to risk between Glasgow and London. RM asked for specifics and reassured the Forum that the inspectors would be able to give a reasonable response as to why questions were asked. RM invited Forum members to come back to him with specific cases.
MP said that a formal response to the letter will be issued and a meeting set up if necessary.
The Forum decided that RM would have a standing invitation to the meetings.
Around six – eight companies are due to attend the proposed roll-out meeting, which is planned to be held in February. Shared workspace was not currently available for Oil and Gas businesses dealt with in Local Compliance.
Action point: MP to discuss with Alain Gray the possibility
of rolling out shared workspace to Local Compliance, as phase three, and to
discuss the planned February or March event – the date and how many
attendees.
It was decided to try to increase the take up of companies getting involved
in shared workspace.
There had been some interest from business. CG had circulated the information to members, which is available for others to pass on. It was emphasised that the opportunities could be for people across HMRC and not just CRMs in the LBS. The CRMs will follow this up.
MP had suggested a slight redrafting of the terms of reference of the Forum; a new point had been added relating to facilitating the meeting of customers’ compliance obligations. MP would welcome feedback from industry representatives on this. Once agreed the terms of reference will be published on the website.
The feedback from the conference had generally been very positive; attendees liked the presentations and topics. The Forum felt that the general perception was that the 2006 conference was the best held so far and that it should continue. The facilities were not so well liked, however Somerset House conference room is the only HMRC room in the central London estate suitable for the event. The options for 2007 are either to find a smaller HMRC room available for free, which would limit the number of possible attendees, or to commit funds to rent a room for the day; this would be up to the conference management committee. However Somerset House conference room has been provisionally booked for 7 November 2007. The feedback also included a number of possible topics for inclusion at the next conference.
Consideration will be given at the next Forum meeting to the planning of the 2007 conference.
None.
The next meeting will take place on Tuesday 17 April 2007 at 2.30.
