Draft legislation has been published which is intended to ensure that more of the profits made by offshore contractors in the UK are subject to UK tax.
Draft legislation has been published which is intended to ensure that more of the profits made by offshore contractors in the UK are subject to UK tax. The Treasury estimates that offshore contractors have used intra-group payments to move up to 90% of operating profit made in connection with activity on the UK Continental Shelf (UKCS) overseas.
The legislation will cap (at 7.5%) the tax deduction available for a bareboat (or similar) leasing payment in the UKCS to an associated person, where this arises as part of a composite service. The legislation will also ensure that the profits arising from that service are not reduced by unrelated tax relief. Any amounts arising in excess of the cap can be set against non-UKCS activity.
The draft legislation is published for a short period of technical consultation, which will close on 9 May 2014.
Offshore employment intermediaries: certification system: the Income Tax (Pay As You Earn) (Amendment) Regulations, SI 2014/474 , introduce a system of certification from 6 April 2014 under which a North Sea oilfield licensee is deemed to be the employer for tax purposes, where an offshore employment intermediary discharges the PAYE and NIC obligations on behalf of that licensee. This new certification system was set out in the consultation on offshore employment intermediaries held between May and August 2013 and is subject to the passage of the relevant legislation in Finance Bill 2014.
Draft legislation has been published which is intended to ensure that more of the profits made by offshore contractors in the UK are subject to UK tax.
Draft legislation has been published which is intended to ensure that more of the profits made by offshore contractors in the UK are subject to UK tax. The Treasury estimates that offshore contractors have used intra-group payments to move up to 90% of operating profit made in connection with activity on the UK Continental Shelf (UKCS) overseas.
The legislation will cap (at 7.5%) the tax deduction available for a bareboat (or similar) leasing payment in the UKCS to an associated person, where this arises as part of a composite service. The legislation will also ensure that the profits arising from that service are not reduced by unrelated tax relief. Any amounts arising in excess of the cap can be set against non-UKCS activity.
The draft legislation is published for a short period of technical consultation, which will close on 9 May 2014.
Offshore employment intermediaries: certification system: the Income Tax (Pay As You Earn) (Amendment) Regulations, SI 2014/474 , introduce a system of certification from 6 April 2014 under which a North Sea oilfield licensee is deemed to be the employer for tax purposes, where an offshore employment intermediary discharges the PAYE and NIC obligations on behalf of that licensee. This new certification system was set out in the consultation on offshore employment intermediaries held between May and August 2013 and is subject to the passage of the relevant legislation in Finance Bill 2014.
