In Total E&P North Sea UK Ltd and another v HMRC [2020] EWCA Civ 1419 (29 October 2020) the Court of Appeal held that companies’ basis of apportionment of adjusted ring-fence profits for an accounting period which straddled a change in the rate of the supplementary charge was just and reasonable.
The taxpayer companies operated oil fields and were subject to the supplementary charge on their adjusted ring-fence profits. The supplementary charge was increased from 20% to 32% for accounting periods beginning on or after 24 March 2011. Accounting periods straddling that date were treated as two separate periods with profits apportioned accordingly. Both companies had accounting periods which ran from 1 January to 31 December 2011 and so straddled the point at which the supplementary charge was increased.
FA 2011 which effected the change in rate provided that where basic time apportionment would ‘work...
