Income Tax on Offshore Allowance

[Binx]

This is my first post so be kind!

Was having a chat with a fella at work today and it turned into a bit of a disagreement. We both work for a private helicopter firm that provides a search and rescue service to a large offshore oil company. We crew the helicopter but are not pilots. We're classed as aircrewmen.

We're based in Aberdeen (that's what our contract says) but divide our time between an offshore platform and the Shetlands. We receive an 'Offshore Allowance' which is separate from our salary, an extra £100 for every night we're away from Aberdeen and detached to the rig/Shetlands which is subject to income tax/NI. However, this doesn't count towards our pension (company matched 4-9% of salary).

He maintains that we shouldn't be paying tax on it, similar to not paying tax on our subsistence allowance (£35 a day to cover our three meals if we're away training somewhere). I maintain HMRC would just laugh at us if we tried to claim the tax back!

What are your thoughts?

[bd6759]

The allowance is classed as earnings, and therefore subject to tax. Earnings are:

• any salary, wages or fee,
  any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money's worth, or
  anything else that constitutes an emolument of the employment.

Strictly the subsistence allowance should be taxed unless you can show that it is actually spent on subsistence.