Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 305: Offshore oil and gas workers: mainland transfers
1267.This section provides an exemption from income tax for certain benefits received by a limited number of employees who work on offshore oil or gas installations. It derives from ESC A65. Legislating the concession is a minor change to the law. See Change 68 in Annex 1.
1268.Those employees whose permanent workplace is the installation would normally be chargeable to tax in respect of any transport, accommodation and subsistence provided. That is because the travel to that workplace would be travel between home and work, so no deduction could be claimed under Part 5 for that or for any associated accommodation and subsistence. Under ESC A65 such benefits are not charged to tax.
1269.The provision of transport exempted by this section is confined to that part of the journey between home and work which starts at the mainland departure point from which the oil and gas rig workers are normally transported to the offshore installation. In subsection (3) this is defined as “transfer transport”. Apart from travel from the nearby overnight accommodation (defined in subsection (6) as “local transport”), it does not provide exemption for travel between the mainland departure point and a place other than the offshore installation.
1270.If the employee has a permanent workplace on the mainland, the provision of transport to the installation is not exempt, but a deduction under Part 5 would be available. The same applies to the accommodation and subsistence in connection with such travel. This position is preserved by subsection (5) which makes it clear that the exemption only applies to the provision of transport, accommodation and subsistence for which a deduction would not be due if the employee had met the cost.