OT04746 | PRT: administration: informal claims - research expenditure

‘Informal Statements’

When considering informal research claims it is essential to ensure that all of the conditions of OTA75\S5B are satisfied including the condition in OTA75\S5B(1)(b) which entails a three-year wait, see OT14125. OTA75\S5B was introduced to allow relief for expenditure failing to qualify for relief altogether (see OT14100), not to create a more general opportunity to make claims for relief outside a field for which expenditure might in due course become allowable under existing field-based rules. A three-year period from the time expenditure was incurred was considered a reasonable time to allow to elapse in order to establish field-linkage. The OTA75\S5B(1)(b) test is one which has to be applied at or after a particular time. It cannot be anticipated. Even though beforehand there may be a reasonable degree of certainty that expenditure will qualify, this is not enough to satisfy the provisions and the declaration which a claimant is required to make in presenting a claim.

It follows that LB Oil & Gas is not prepared to accept that there can be informal (or formal) claims under OTA75\S5B for expenditure incurred less than three years prior to the date of claim. However, it is recognised that companies may request consideration of such matters earlier and that it will probably be advantageous to consider particular aspects of the OTA75\S5B position close to the time when expenditure has been incurred and information is readily available.

Whilst therefore informal claims are not accepted in such circumstances, LB Oil & Gas is prepared to receive statements of expenditure which companies see as potentially available for claim under OTA75\S5B, but not to ‘agree’ them. LB Oil & Gas action in such cases will be limited to gaining an understanding of the source and nature of the figures. The degree to which this is done is a matter of judgement to be exercised as appropriate in the particular case.