I've got a Westfield SEiGHT with a 3.9L EFI Rover V8 fitted which uses a remote filter housing to avoid the steering column in a very tight engine bay. On Friday I came back from a trip and there was a lot of oil on my drive. After everything cooled down and cleaning everything again, it turned out that the oil pressure sensor has started to leak where it screws into a T-piece that screws into the remote filter housing

At first I thought it was the T-piece itself as there seemed a big gap between housing and T-piece, but it was definitely the sensor end.
I removed them both from the car and it appears that I can not tighten the sensor enough for it to form a good seal, so I was thinking of adding a dowty washer to it. Or should I use a tiny bit of PTFE on the end of the (tapered) thread of the sensor?

I was planning to add a 3mm wide o-ring to sit between the T-piece and housing to get rid of that gap, can anyone see an issue with this?