OT46600 - Non-Residents Working on the UK Continental Shelf: Construction Industry Scheme - Application of Construction Industry Scheme to the oil and gas industry

»Ê¹ÚÌåÓýapp Construction Industry Scheme provides for the deduction from payments made by contractors to certain sub-contractors. Guidance on the operation of the scheme can be found in HMRC’s booklet CIS340 and in the Construction Industry Scheme Reform Manual (CISR).

»Ê¹ÚÌåÓýapp scheme applies only to payments for those construction operations that take place on the mainland of the UK or within its territorial waters.

»Ê¹ÚÌåÓýapp definition of construction operations excludes drilling for, or extraction of, oil or natural gas. »Ê¹ÚÌåÓýapp operation of drilling rigs is therefore outside the scheme.

Examples of offshore activities that involve construction operations are:

  • »Ê¹ÚÌåÓýapp construction of oil and gas production platforms.
  • »Ê¹ÚÌåÓýapp construction and installation of deck modules for production platforms.
  • »Ê¹ÚÌåÓýapp laying of underwater or underground pipelines.
  • »Ê¹ÚÌåÓýapp construction of terminal facilities.

Where a payment within the scheme is made by a contractor to a subcontractor, deductions at the appropriate rate must be made from the full payment except for that part of which represents the cost of materials.