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HMRC v Total E&P North Sea UK

In HMRC v Total E&P North Sea UK [2019] UKUT 133 (1 May 2019) the UT found that the method adopted by the appellants to apportion their profits between two tax years was not just and reasonable.

The two appellants operated oil fields in the North Sea. They were subject to UK corporation tax on the profit of those trading activities as if they amounted to a separate ringfenced trade in the UK. These ringfenced profits were subject to a supplementary charge of corporation tax over and above the normal rate. On 23 March 2011 the supplementary charge was increased overnight from 20% to 32%. Both companies elected under FA 2011 s 7(5) that for the purposes of calculating the supplementary charge for the period after the rate change the companies’ profits should be apportioned by reference to an actual basis rather than the statutory...

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