Income Tax (Earnings and Pensions) Act 2003 section 689A

Oil and gas workers on the continental shelf

Section 689A ensures that PAYE obligations are met for workers employed in oil and gas exploration and exploitation activities on the UK continental shelf, even where the employer is based offshore and not directly subject to PAYE regulations.

• Where an offshore employer or intermediary pays a continental shelf worker but does not operate PAYE, the "relevant person" (typically a UK-based associated company of the employer, or the oilfield licence holder) is treated as making the payment and must operate PAYE on it.
• The deemed payment amount is grossed up (i.e. the net pay plus the tax and relevant debts that should have been deducted) if the worker received a net-of-tax amount, or simply the payment amount if no deductions were made.
• HMRC may issue a certificate to a relevant person confirming that PAYE is already being properly operated for specified continental shelf workers, in which case the relevant person's obligation under this section is switched off while the certificate remains in force.
• Where more than one relevant person exists for the same worker and the same payment, only one of them needs to account for the tax — once one complies, the others are relieved of the obligation.