Under the North Sea tax regime, although companies are required to pay a supplementary corporation tax charge of 10% (20% before 1 January 2016, 32% before 1 January 2015), they may also obtain 100% first-year allowances for capital expenditure incurred wholly for the purposes of their trade of extraction of oil or gas in the UK or on the UK Continental Shelf ('ring fence' trade; see Division D7.9) which is subject to the supplementary charge. In addition, first-year allowances are to be given for certain expenditure incurred by a company under the mineral extraction allowances rules for the same purposes (see Division B3.4)1.
The basic conditions which must be
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