Chapter EIM34110

CourtHM Revenue & Customs
Record NumberEIM34110
Published date22 May 2014
Section 305 ITEPA 2003

Employees with a permanent workplace at an offshore installation are exempt from Income Tax where they are provided with:

  • transfer transport
  • related accommodation or subsistence, or
  • local transport

The exemption also applies where an employee is paid or reimbursed reasonable expenses incurred on such transport, accommodation or subsistence. Before 6 April 2003, the exemption given by section 305 was provided by Extra-Statutory Concession A65 (ESCA65).

Meaning of offshore installation

See EIM33102 to EIM33104 for guidance on the meaning of offshore installation. The following structures or vessels can be accepted as offshore installations for the purpose of section 305 ITEPA 2003:

  • fixed production platforms
  • floating production platforms
  • floating production storage and offloading vessels (FPSOs)
  • floating storage units (FSUs)
  • mobile offshore drilling units (MODUs) including drillships, semisubmersible and jack-up rigs
  • flotels (floating accommodation units)
Meaning of transfer transport

Transfer transport means transport by sea or air between the mainland of Great Britain or Northern Ireland and an offshore installation where:

  • the place of arrival or departure on the mainland is one to or from which transport between the mainland and the offshore installation is provided for employees generally and
  • the cost would not be deductible under Part 5 ITEPA if the employee incurred and paid it

The exemption does not apply to any provision or expense that qualifies for a deduction under the main rules for travelling expenses in sections 337 to 340 ITEPA 2003 or...

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