oil and gas worker tax relief question

[waynesworld]

So everyone keeps speaking about what the loop holes is so I’ve been looking at the inland revenue website which is the bible of tax.
At the start of this year I was in formed as a LTD Co we can no longer charge VAT on work carried out offshore so after some debate and research I found that if the Installation is more than 12 Nautical miles from the UK then its falls out with the UK VAT scope.
This begged the question about taxation so as a LTD Co i’m buggered and the tax man wins with corporation tax. However according to HMRC website as a PAYE employee the following apply:
Here is the list of documents have a look for yourselves. But is HMRC state it in black and white then guys submit your claim and any rebate is better than a kick in the backside
Use the following link to check it out if in doubt. http://www.hmrc.gov.uk/manuals/eimanual/EIM65799.htm

EIM67100 - Tax treatment of workers in the North Sea and other offshore oil and gas fields: general
The guidance in EIM67105 to EIM67195 below applies to persons working offshore in connection with the exploration or exploitation of the oil and gas resources of the United Kingdom continental shelf. Workers in onshore oil and gas fields in the United Kingdom are subject to normal taxation procedures.

EIM67105 - Tax treatment of workers in the North Sea and other offshore oil and gas fields: territorial extension of the charge to tax on employment income
Section 1013 ITA 2007
For all income tax purposes, United Kingdom territorial waters, that is, waters within twelve nautical miles of the shore, are treated as being part of the United Kingdom. So earnings for duties performed in territorial waters are classed as earnings for duties performed in the United Kingdom.

Exploration or exploitation activities in a designated area
For the purposes of the charge to tax on employment income only, Section 41 ITEPA 2003 treats general earnings arising from duties performed in a designated area in connection with exploration or exploitation activities as general earnings in respect of duties performed in the United Kingdom.

For the meaning of exploration and exploitation activities and designated area, see EIM67115 and EIM67120.

EIM67110 - Tax treatment of workers in the North Sea and other offshore oil and gas fields: territorial extension of the charge to tax on employment income: effect of Section 41 ITEPA 2003
Section 41 ITEPA 2003
Section 41 treats general earnings arising from duties performed in a designated area in connection with exploration or exploitation activities as general earnings in respect of duties performed in the United Kingdom. The effect of Section 41 is to:
• enlarge the scope of the charge to tax on UK-based earnings in Sections 25 and 27 ITEPA 2003 (see EIM40201 onwards) and
• restrict the scope of the deduction from seafarers' earnings (see EIM33000 onwards) and
• restrict the scope of Section 22 ITEPA 2003 (chargeable overseas earnings, see EIM40102).
No effect on residence
Section 41 has no relevance in the determination of an individual's residence status for United Kingdom tax purposes. The question of residence is decided by reference to periods actually spent in the United Kingdom or in United Kingdom territorial waters. Submit cases where advice is needed on residence status to CAR Personal Tax International, Advisory (Residence and Domicile Technical Team) in the usual way (see EIM42870 to EIM42880 and IM30).

EIM67115 - Tax treatment of workers in the North Sea and other offshore oil and gas fields: meaning of exploration or exploitation activities
Section 41(2) ITEPA 2003
Exploration or exploitation activities means activities carried on in connection with the exploration or exploitation of so much of the sea bed and subsoil and their natural resources as is situated in the United Kingdom or a designated area. This definition is fairly wide; it covers not only workers employed on pipelaying vessels, oil and gas rigs and other offshore installations, but also those engaged in ancillary or support work. As regards divers and diving supervisors see the Employment Status Manual (ESM).

EIM67120 - Tax treatment of workers in the North Sea and other offshore oil and gas fields: meaning of designated area
Section 41(2) ITEPA 2003
Designated area means an area designated by Order in Council under Section 1(7) of the Continental Shelf Act, 1964. These areas comprise, broadly, the United Kingdom sector of the continental shelf. They extend in the north to latitude 62N. They are divided into quadrants numbered from 1 to 211, and each quadrant is subdivided into up to thirty blocks. An offshore location is usually identified by the quadrant and block number in which it is situated, for example, the Piper field is in block 15/7 and the Brent field is mainly in 211/9.
Action when there is a claim that duties performed on the continental shelf were outside of the designated area
If an employee claims that his or her duties on the continental shelf were performed outside the United Kingdom designated areas, obtain the following facts:
• the name of the platform, barge, vessel or rig on which the duties were performed
• the names and address of the employer
• the quadrant and block numbers of the area where the duties were performed
• the dates between which the duties were performed.
If you are then still unable to determine in which sector the duties were performed, submit the case to Large Business Service (Oil and Gas Sector).

EIM67125 - Tax treatment of workers in the North Sea and other offshore oil and gas fields: effect of double taxation agreements
Many Double Taxation Agreements (DTAs) have an employment income or dependent services article, which exempts non-residents from United Kingdom tax provided they work for an overseas employer and are in the United Kingdom for less than half the year (see DT220). Most DTAs use for this purpose a definition of the United Kingdom that includes the designated areas of the continental shelf, but some of the older ones do not. Where an agreement does not specifically mention the continental shelf, employees working there should not be regarded as working in the UK for the purposes of that particular DTA.

EIM67195 - Tax treatment of offshore oil and gas workers: offshore rigs and platforms: travel costs
Sections 305, 337 and 338 ITEPA 2003
The cost of the journey between the employee's home and the mainland departure point will be deductible under Section 338 ITEPA 2003 where the rig is a temporary workplace, see EIM32075.

Where a change in the employee's place of work from one rig to another does not have any substantial effect on his or her ordinary commuting journey, the two rigs are treated as a single workplace, see EIM32280. This may result in the two rigs being treated as a permanent workplace where they would each otherwise have been treated as temporary workplaces. This is illustrated by example EIM32281. See also the guidance below.

Sections 305 ITEPA 2003 replaced Extra-Statutory Concession A65 with effect from 6 April 2003. It removes any tax charge on provided transport between the mainland departure point and the rig, together with related costs, see EIM34110.
Employee transfers to a rig in a different field
We accept that the change of workplace rule does not apply when an employee stops working at a rig in one field and begins work at a rig in a different field. In that case, we accept that the two rigs are different workplaces. The two rigs can therefore be considered separately, for the purpose of the 24 month rule, in deciding if either or both of them is a temporary workplace. If the rig to which the employee is travelling is a temporary workplace, he or she will be able to deduct the expenses of travelling from home to the mainland departure point
Employee transfers to a rig in the same field
The situation is different when an employee is transferred from one rig to another within the same field. If the employee lives at or near the mainland departure point it is likely that the employee’s journey from home to one rig will be substantially different from his or her journey to another rig, even when the two rigs are within the same field. So the change of workplace rule will not apply. However if the employee lives a long way from the departure point the journey from there to the rig may be a relatively small part of the overall journey. In that case, a transfer from one rig to another within the same field will not have a substantial effect on the overall journey. The change of workplace rule will then apply to treat the two rigs as a single workplace for the purpose of the 24 month rule.
Employee transfers to a rig in the same field - 75 mile “rule of thumb”
In order to simplify the operation of the 24 month and change of workplace rules in these cases we have agreed that the change of workplace rule will not apply where an employee transfers between rigs in the same field and he or she lives no more than 75 miles from the mainland departure point. The two rigs will then be treated as separate workplaces for the purpose of the 24 month rule.

If the employee lives more than 75 miles from the departure point our presumption will be that a transfer from one rig to another within a single field will not have a substantial effect on the employee’s overall journey. The change of workplace rule will apply and the two rigs will therefore be treated as a single workplace for the purpose of the 24 month rule.
Operative date
The approach outlined above was discussed with industry representatives in March 2004. You should apply it in all open cases. However, settled liabilities should not be re-opened.
Employee living more than 75 miles from mainland departure point – disputed cases
Employees who live more than 75 miles from the mainland departure point may still argue that, in their particular case, a transfer from one rig to another within a single field is not affected by the change of workplace rule. Such cases should be dealt with on their merits. If, when you have obtained full details of the employee’s journeys, you are unable to reach agreement you should arrange for the matter to be brought before the First-tier Tribunal (see EIM31705). At the appeal hearing the HMRC case will simply be that, in the circumstances of the case, the change of workplace did not have any substantial effect on the employee’s journey or expenses. The 75 mile “rule of thumb” has no standing in law and youshould therefore not mention it in proceedings before the First-tier Tribunal.