HC Deb 26 February 1981 vol 999 cc960-1
7. Mr. Jessel

asked the Chancellor of the Exchequer in what circumstances it is the practice of the Inland Revenue to treat the costs of transport of persons employed in North Sea oil rigs as allowable businesses expenses.

Mr. Peter Rees

Where an employer meets the costs of transporting employees to their place of work, this is normally a deductible expense for tax purposes.

Mr. Jessel

But where the person travelling to work pays the cost himself, and where such a person is working on an oil rig, perhaps requiring a journey of 700 or 800 miles—from, say, London to Aberdeen where he might have to spend the night, and then travel a further 200 miles to get to a North Sea oil rig the following day—does my hon. and learned Friend think that it is fair that such a person should be treated for tax purposes as though he were an ordinary commuter? Will my hon. and learned Friend have another look at this?

Mr. Rees

I recognise that it is difficult to assimilate the case of an oil rig worker to that of an ordinary commuter, and I undertake to look at the matter again. My hon. Friend will be aware of the general principle that if an employee is reimbursed the cost of travel to work, that is generally taxable in his hands. But I recognise that, perhaps, oil rig workers present special difficulties, although the House will also recognise that the Revenue on the whole does not tax oil rig workers on the cost of travelling from Aberdeen or other points on the mainland to the rig. That cost is normally provided by the employer.

Mr. Douglas

Will the Minister give us some indication of the progress being made in relation to the report by the Public Accounts Committee on tax evasion by people employed on North Sea oil rigs?

Mr. Rees

Yes, we are aware of the problem. There is no very simple solution but we are pressing employers hard in this area to take account of their responsibility, particularly for PAYE.