The measure

A Statutory Instrument has been laid to expand the Investment and Cluster Area allowances to certain types of operating and lease expenditure, as first announced at Autumn Statement 2015.

Who will be affected?

Oil and gas companies that operate in the UK or on the UK continental shelf.

When?

Expenditure within any of the categories of expenditure included in the expansion of the Investment and Cluster allowances will qualify for the allowance as long as it is/was incurred on or after 8 October 2015.

Our view

The expansion of the investment allowance to include production enhancing operating expenditure will help maximise economic recovery. This feature of the Investment Allowance and the Cluster Area Allowance has been an ambition of the government ever since the introduction of the measures at Autumn Statement 2014 and Budget 2015, respectively.

Now that the legislation has been laid, companies will be able to claim these additional allowances and may wish to reassess their 2015 corporation tax returns to ensure appropriate expenditure is now included.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.