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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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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).