SolvedOT21720 | Energy Profits Levy: Levy profits and loss
From HM Revenue & Customs · Oil Taxation Manual
EPLA22\S1
The EPL is charged on the levy profits in a qualifying accounting period. A qualifying accounting period is an accounting period which begins on or after 26 May 2022 and ends on or before 31 March 2028.
The starting point for calculating levy profits or loss is the company’s ring fence profits or loss, and therefore includes any Research & Development Expenditure Credit (RDEC, see CIRD89700 for further guidance) and aggregate gains under TCGA92/S197 (see OT30440 for further guidance).
The levy applies to a company’s ring fence profits computed with a number of adjustments:
where the company has additional expenditure treated as incurred under EPLA22\S2 (see OT21725 ) then such expenditure is to be taken into account when computing the company’s profits.
Petroleum Revenue Tax (PRT) repayments arising from decommissioning are left out of account (see OT21790).
No account is to be taken of RFCT/SC losses and group relief (see OT21795).
No account is to be taken of amounts received for assets that have been subject to qualifying payments made into Carbon Capture Usage and Storage (CCUS) decommissioning funds (FA25\Sch3\Para5) (see OTA28475).
After these adjustments, any qualifying levy loss may be carried forward or back or group relieved against levy profits, subject to detailed rules explained in OT21795.