OT45550 - Non-residents working on the UK continental shelf: exemption for licensee from recovery of tax - exemption certificate applications
An application for an exemption certificate may be made by the non-resident contractor who will or might become liable to tax which, if remaining unpaid, could be recovered from the licensee. It is not the licensee who makes the initial application. But if the application is successful, the certificate is sent to the licensee for whom the work is to be done, thereby providing confirmation to the licensee that they will not be liable for any unpaid tax.
As non-residents are generally beyond the normal recovery powers exercised by HMRC, the right to recover from a licensee is a powerful tool which is not surrendered unless LB Oil & Gas. representing the Commissioners of HMRC, is satisfied that the non-resident will meet all the obligations imposed on it. This means that the non-resident has to demonstrate that it can be relied on to make proper returns, pay its tax when due, and generally comply with its tax obligations.
Only non-resident persons who are or may be chargeable to tax by virtue of CTA2009\S1313 or ITTOIA2005\S874 may apply for a certificate. This is because tax chargeable on other non-residents (for example a foreign company trading through a UK permanent establishment) is not recoverable under TMA70\S77C.