Tax Deductibles For Oil & Gas Workers

Tax Deductibles For Oil & Gas Workers

Oil & Gas Workers: What They Can Claim?

The professional life for an oil and gas worker can be hard, but there are certain benefits with the job. This is especially true if you work in the North Sea because you can save a lot of taxes and, in some cases, even all of it. 

If you are from a country with double taxation agreement with the UK, you will be able to claim tax relief as well when working for a company based here. If you are employed full time on offshore installations in the oil and gas industry, you could be entitled to a full tax relief, depending on the following:

  • Your domicile or residency
  • Location of the rig or installation (non-UK sectors of the North Sea, UK sectors, UK sectors of the Continental Shelf, etc)
  • Total time spent on the rig per year
  • Residency of employer (UK company or not)

When it comes to the total time spent on a rig, it is best to keep it under 183 days within a tax year. On the terms of Double Taxation Agreement (DTA)

  • If you work for an overseas-based employer and are out of the UK long enough, DTA will exempt you from paying tax.
  • If you are working in the Continental Shelf, the location must be specifically mentioned in the DTA for you to be regarded as working in the UK.
  • An oil and gas Landman is considered a UK resident for tax purposes by some DTA terms if he works in the designated area of the UK sector of the Continental Shelf.

What Oil and Gas Workers Can Claim For

Meals Meals are generally 50% deductible. But it can be deductible by 100% if the meal is for the convenience of the employer. That is, a worker is able to continue his work because of the meal provided. Travel Travel expenses for oil and gas workers are deductible, depending on the job assignment, whether it is permanent or temporary. It is considered permanent if the work would last for a year or longer. In this case, travel expenses are not deductible. If the job assignment only lasts for a year or less, it is considered temporary and travel expenses are deductible, which can make a significant difference in the amount of tax that must be paid. In the event that an employer pays some of the travelling expenses, the worker can still file for claim. The only exception is when the employer pays travel expenses in full or the 45 p per mile for the first 10,000 miles in a year.

Temporary Stay On Location

Some oil and gas workers stay on the rig for the entire job assignment, while others travel home every two weeks. The latter is still eligible for a tax claim. Most of short employees work 2 weeks on and 2 weeks off can claim an average of £700 to £900 per year. Other deductibles include:

  • Cost of overnight stay in a hotel before leaving for the rig. Receipt is required to make a claim.
  • Fare on public transport and taxi fare from hotel to heliport. Requires a receipt.

It is vital that an oil and gas worker presents the SA tax return to claim 100% tax back. P45/P60 vouchers from an employer (s) are also required. Because the rules of tax relief are quite complicated, it is highly recommended that employees seek help from tax experts. Contact us to find out exactly how much tax you can claim and we can follow it up and get you your money back quickly!

Image source – Unsplash

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