Tax and National Insurance for oil and gas workers
There are special rules for tax and National Insurance if you work in the oil and gas industry.
Introduction
The rules about tax and National Insurance for oil and gas workers are complicated. They vary according to whether you:
- work within UK waters
- work for a UK company
- are a foreign or UK national
- work in a country that has a Double Taxation Agreement (DTA) with the UK
You work in the gas and oil industry if you:
- work on oil and gas rigs and other offshore installations
- are employed on pipe laying vessels
- do ancillary or support work for the oil and gas industry
UK residents
You pay UK tax and National Insurance (NI) as usual if you work in oil and gas fields, either onshore in the United Kingdom or in the designated area of the UK sector of the Continental Shelf (the part of the sea bed in the waters around the UK that the UK has the right to exploit for oil and gas).
NI exemptions on expenses
Payments by your employer or someone else for travel between the mainland and the rig, or for overnight stays on the mainland close to the departure point and subsistence, are excluded from calculations of Class 1 NICs.
Non-resident workers
If you are resident in a country that has a Double Taxation Agreement (DTA) with the UK, check your country’s treaty for the terms of the agreement.
Most DTAs include the designated area of the UK sector of the Continental Shelf in the definition of the United Kingdom, but some do not. If the Continental Shelf is not specifically mentioned, a worker there is not regarded as working in the UK.
Many DTAs exempt you from UK tax if you work for an employer based abroad and you are out of the UK for long enough.
The terms of other DTAs treat you as a UK resident for tax if you work in the designated area of the UK sector of the Continental Shelf.
Your UK National Insurance (NI) position will depend on a number of factors including any Social Security agreement that the UK has with the country where you live. You may have to pay UK NI. To check your NI position contact HMRC.
Tax relief
If you think you may be entitled to tax relief on your earnings, contact HMRC.