Employment status of north sea divers

[Grahamstax]

A friend of mine has been working as a north sea diver. He works mainly for the same company and they provide payslips and p60s with class 1 ni deducted but no tax deduction

He has been told that he is self employed and liable for ni and tax accordingly

He has asked me if that's the case why is he paying class 1 at source

Everything I can see on hmrc website says there are special rules for deep sea divers but then don't specify what they are! Does anyone have any experience of this as his employed/self employed status is fundamental to his tax return

Thanks

[DerekMoore]

A diver or diving supervisor who is working in exploration and exploitation activities is an employee. However his employment income is taken out of ITEPA by virtue of s6(5) of the act and is taxed under s15 of ITTOIA as trading income.
Although he is taxed as trading income, the income is from an employment so he can’t form a partnership or incorporated company. I looked into those options already.

As an employee he is given an NT tax code under the PAYE regulations and subject to Class 1 NIC. Regulation 92 of SCR 2001 prevents a charge to class 4 NIC as his earnings are derived from an employment not self employment.

Aberdeen 1 deals specifically with divers and diving supervisors working in the UK continental shelf under s15 ITTOIA.

The claims he can make on the income are subject to scrutiny given the specific employment status, but if he is a member of the RMT union which represent the offshore diving community, the diving section have a list of revenue and capital allowances he can make to reduce his tax liability.

As the income is from employment and there is no VAT liability either.

Hope that helps