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HMRC internal manual

Oil Taxation Manual

Non-residents working on the UK continental shelf: exemption for licensee from recovery of tax- the exemption certificate application process

LB Oil & Gas encourages applications from contractors and sub-contractors as applications are an important source of information and are an early indicator of offshore activity. LB Oil & Gas also recognise that such applications are of great importance to the applicant and it gives priority to the processing of applications. LB Oil & Gas is happy to discuss applications prior to the work starting in the North Sea sector and to give all necessary advice or help to the contractor to enable them to comply with their UK tax obligations.

Applications may be made by non-resident contractors, sub-contractors, divers or diving supervisors, whether in a direct or indirect contractual relationship with the licensee. When a certificate is granted it is sent to the relevant field operator specifying the name of the non-resident contractor etc. and the licence number (or numbers) to which the exemption certificate relates. Exemption continues until the certificate is cancelled by LB Oil & Gas.

For reasons of confidentiality LB Oil & Gas does not inform a licensee when or why it is decided not to grant exemption in respect of a particular contractor, sub-contractor, diver or diving supervisor.

Exemption certificates are not issued in respect of persons assessable under the Income Tax (Earnings and Pensions) Act 2003. This is because unpaid income tax charged in relation to employment income is not recoverable from a licence holder.

An application for an exemption certificate may be made by a non-resident in receipt of income or capital gains related to exploration or exploitation rights connected with activities authorised by a licence granted under Part 1 of the Petroleum Act 1998.