SolvedOT21730 | Energy Profits Levy: Investment expenditure
From HM Revenue & Customs · Oil Taxation Manual
EPLA22\S2(2) sets out expenditure that is investment expenditure and therefore qualifies for the 29% additional expenditure (80% before 1 January 2023). Expenditure is investment expenditure if:
It is capital expenditure, operating expenditure or leasing expenditure,
it is incurred for the purposes of oil-related activities,
it is not incurred for disqualifying purposes, and
it does not consist of financing costs or decommissioning costs.
Capital expenditure here takes its ordinary meaning for tax purposes and is not necessarily limited to expenditure for which capital allowances are available (see OT21735).
The meaning of various terms and concepts in the categories of investment expenditure specified in EPLA22\S2(2) are defined in subsequent sections of the EPLA22 and guidance is provided in subsequent sections of this guidance.
“Capital expenditure” is discussed in OT21735.
“Operating expenditure” is defined in EPLA22\S3 and discussed in OT21740.
“Leasing expenditure” is defined in EPLA22\S4 and discussed in OT21745.
“Oil-related activities” is defined in EPLA22\S18 and CTA10\S274 and is discussed in OT21755.
“Disqualifying purposes” is defined in EPLA22\S5 and is discussed in OT21760.