Chris Gautrey (CG) - ConocoPhillips - UKOITC
Peter Gunn (PGu) Newfield Exploration Company OGIA
Phil Greatrex (PG) - CW Energy - Brindex
Sandra MacRae (SM) BP UKOITC
Valerie Macorison (VM) ExxonMobil UKOITC
Malcolm Phelps (MP) - LBS Oil and Gas
Diane Williams (DW) LBS Oil and Gas
Mike Crabtree (MC) - LBS Oil and Gas
Niran Khera (NK) LBS Oil and Gas
Andrew Parrock (AP) LBS Oil and Gas
Tony Chanter (TC) LBS Oil and Gas
Claire Roebuck (CR) LBS Oil and Gas (minutes)
Russell Malloch (RM) Local Compliance, Glasgow
Ruth Bulteel (RB) Large Business and Employers Customer Unit
Rob Douglas (RD) H M Treasury
Adam Cran Shell
Agustin Rivara UKOOA
Fernando Esteve BG
Jacqui Akinlosotu ENI
John Mawson LBS Oil and Gas
Ray Casanove LBS Oil and Gas
All attendees introduced themselves.
MP opened the meeting by informing members that David Cooper has left HMRC and DW has taken on his role, Chris Waterton has also moved on and Jacqui Akinlosotu has taken over as the OTAC contact, RB has left the Oil and Gas policy team and has taken on the role that Jonathan Bates had within the Forum, NK has joined the policy team. The new members were welcomed to the Forum and thanks were recorded for the members who have left.
Since the last meeting the Terms of Reference have been agreed and are on the website. The minutes from the last meeting have also been published on the internet with a statement saying that the minutes are prepared by HMRC but are seen by industry prior to publication. The minutes from the last meeting were agreed.
Budget 2007 – legislation
Budget 2007 saw no changes to the North Sea fiscal regime, with a specific exemption for the regime from the wider changes made to the business tax regime. CG reported that UKOOA have raised their concerns about the lack of a reduction in the main CT rate for the North Sea. RD highlighted the fact that the Budget was a balanced package, which had also included changes to the capital allowances regime, which were not being extended to the North Sea fiscal regime, and that government took the view that given the special circumstances faced by the North Sea and the importance of stability in the fiscal regime it was appropriate to retain the existing fiscal regime at the current time. PGr raised the question of whether IBAs were being abolished within the ringfence – RD explained this was the current intention as they were not seen as forming part of the North Sea fiscal regime and expected this to have a minimal impact on the North Sea fiscal regime. If there were any issues RD invited the forum to bring such cases to his attention.
Legislation, which has been amended following initial discussions with industry, has been published removing decommissioned and subsequently recommissioned fields from PRT, as announced in the PBR. Any further comments on the Finance Bill clauses need to be submitted soon.
Discussion paper on NS fiscal regime
The paper was published with the budget. It contained messages from industry, initial government conclusions and the criteria for possible policy changes. It is intended that the discussion paper will lead to further dialogue over the next few months regarding the possibilities for change. The status quo including the retention of PRT was still a clear option.
Change of use working group
The first meeting of the working group was very useful and productive in highlighting areas of uncertainty in the legislation. MC is producing a paper listing the generic issues and considering specific matters, which will be sent out soon. The document will be used to further discussion at the next meeting, to be held on 26 April. The group is on target to produce a paper for the summer. Ministers have shown a keen interest in the progress of the group and the possible work that could follow on.
FA2006 rules; evaluation of tax impact; HMRC Guidance Notes
AP reported that he had looked at the tax impact of the changes to oil pricing, the revised nomination scheme and the attribution of blended crude oil. Provisional figures suggested that the total tax effects of the changes were in line with Red Book estimates in the order of £80 million. AP talked through a graph he had produced; previously there had been an inverse relationship between the oil price and the percentage of arms length sales, with strong negative correlation between that percentage and changes in oil price. Since the new regulations came into effect the arms length sales percentage follows the market price and the correlation with oil price change has fallen to near zero.
HMRC Guidance Notes: MC and AP thanked industry for their comments on the guidance. AP is waiting for a response from the internet publishing team regarding when the new guidance can be put on the internet. MC confirmed that the regulations would be revised to ensure that they were consistent with the guidance notes as they were finally agreed.
PRT deregulation
CG recorded his gratitude for the work done by TC, Hugh Grainger and industry members on PRT deregulation for non-paying fields. The new arrangements will apply from 1H 2007. TC is currently agreeing the notes to go on the internet with industry.
CG was concerned over the level of detail still needed for the PRT1A return despite the FA 2006 changes. MP said that having evaluated the effect of the changes and the information needed to carry out that evaluation that the requirement for the reporting of category one oil deals on the PRT1A would be dropped. MC will write to industry shortly explaining how this would be managed. Industry welcomed this change. LBS Oil and Gas’ view was that they still need the PRT1A for category two oils but would review this after the current returns round. Industry also enquired whether the PRT2 was necessary as it had been found that following the attribution rules changes the Responsible Persons could not guarantee what they were reporting on the PRT2 was correct. AP will consider this with LBS Oil and Gas colleagues.
EU ETS
Neville Howlett and Kerry Pope are meeting with DEFRA next week to discuss EUETS and penalties.
Supplementary charge anomalies
A meeting was held on this matter, where different views on the reading of the legislation were highlighted, HMRC will write to industry soon. HMRC will also write to industry regarding the capital gains issue.
Box 161 on CT return
MP wrote to CG to inform him that HMRC were correcting returns where there have been errors; CG had circulated the letter to industry. Deloitte had alerted all the software users and the package should be corrected for the next return. Industry asked HMRC if it would be possible for them (as well as software developers) to know in advance the actual changes being made to forms.
Action point: MP to establish whether more detailed information can be given.
Communication of Debt Management and Banking
MP informed the Forum that there have been problems of communication with the Debt Management and Banking (DMB) team over allocation of payments resulting in unnecessary visits from Collectors. LBS Oil and Gas have recommended to LBS a protocol involving CRMs that would alleviate future problems. PG said this had been a frequent problem in the past. RM invited Forum members to contact him with any problems they encounter regarding collection matters for Local Compliance.
A couple of documents were published at budget. The HMRC approach to compliance risk management for large business (Opens new window) includes a risk review summary template, which DW talked through. The approach works a lot of issues in real time and aims to get things right through better communication and focussing resource on high risk cases. Industry as a whole should notice changes in the coming year. The Making a difference: delivering the review of links with large business (PDF 1.7MB) document includes details of future consultations. CG raised his concern over the short time frames given for consideration of documents, RB noted these comments but pointed out that the timetable published in the Making a Difference document which she had just circulated, responded to these concerns by publishing up front the dates of future consultation periods so that businesses who wished to take part could plan resources in advance to enable them to do so.
RB, in her new role, has drafted a sector brief and will send it to CG for comments after it has been agreed internally.
Several businesses represented at the Forum had attended a roll-out meeting in March designed to increase awareness of shared workspace. Businesses were encouraged to sign up to shared workspace on a voluntary basis and several had done so. They were now moving on to the implementation phase. More seminars will be held in the future. SM reported that BP had found shared workspace a very good experience particularly for the electronic filing of PRT returns.
RM informed the Forum that the communication issue discussed at the last meeting had been resolved. No specific cases have been brought to RM’s notice regarding technical issues, and Forum members were invited to continue to bring these to RM’s attention.
Alan Williams has been appointed to lead the planning of the conference from HMRC, and names from industry are needed.
Action point: CG to inform MP, by the end of the month, of a couple of people from industry who will be involved in conference planning.
None.
The date of the next meeting has been changed and will now take place on Tuesday 31 July at 2.30.
