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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 - new cases

Where the application is the first contact between the non-resident enterprise and LB Oil & Gas it is necessary for LB Oil & Gas to form a judgement on whether the enterprise is likely to provide details of profits etc. and to pay tax when due. Each application is considered on its own merits.

To assist LB Oil & Gas in reaching a decision on the application the applicant should be prepared to provide the following:

  • a copy of the UK Continental Shelf contract
  • a brief description of the work to be undertaken in the UKCS, including where the work is to be undertaken and how long the work is expected to take.
  • the company’s most recent published accounts (if the company is part of a larger group the consolidated group accounts should also be obtained)
  • any publicity brochures or internet information about any drilling rig or vessel that the contractor intends to use in UK waters.
  • evidence of country of residence for the purposes of Double Taxation Treaties;
  • assurance that the contractor understands the basis on which it will be liable for UK tax;
  • assurance that the non-resident accepts that its profits from activities carried on in the UKCS will be chargeable to UK tax; and
  • an assurance that it will make arrangements for payment of PAYE on employees remuneration.

In appropriate cases the non-resident may also be asked to provide the formal confirmation of officers of the company (or the proprietors of the firm) that all UK tax obligations will be met. If the non-resident co-operates fully and deals with reasonable requests for information it will normally be possible to issue an exemption certificate.