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I've been going offshore for about 5 years now. last year was the first time I qualified for an offshore tax credit from the government. We do a lot of O&G work in the Norwegian sector.

In the past, my company always absorbed the norwegian taxes for their employees working overseas. (Is this the norm for your big companies? I don't really know). Recently, my company sent me a letter saying that because I applied for the offshore tax credit, they want me to reimburse them for the taxes they paid on my behalf in Norway. Which is a lot.

My understanding is that the norm for companies with employees working offshore in Norway is that they pay the tax for the employees, or provide an uplift, or something. Otherwise, what's the incentive to work offshore in Norway?

This was not made known to me up front. Doesn't it seem kind of underhanded? I'm not sure if they have any legal grounds to ask for it back. But my concern now is that in order to get the credit in the future, I need a form from the employer...which they might not give me if I don't reimburse the tax.
Are you talking about claiming tax back from UK or from Norway, assume you are talking about Seafarers Foreign Earnings deduction, or the Norwegian equivalent.

My experience is that companies do NOT pay any extra tax (though many assume their company does) for working in Norway. Some do pay an extra uplift for any Norway work to try and mitigate the extra tax you pay.

If they have paid your Norwegian tax and you are able to claim that tax back, I would see that they would think it reasonable that they get it back, though I doubt they are legally entitled, unless it says so in your contract.

I suggest waiting to hear what advice user YourTaxOffice comes back with once they read this.

Last edited by sarahb on 18:28 Mon 28 Jan 13; edited 2 times in total
I do not believe it is the norm for companies to pay tax on your behalf in this situation, only an incentive as mentioned earlier.

To negate and thought of underhand dealings, I would be inclined to request a copy of your T's and C's and contract and as much other gumpf from HR as you possibly can, and have a good read.

"Forewarned is forearmed"
I was on the kettle!
Yes, it's the seafarer's deduction I'm talking about.

In previous years, my company has always paid my tax when I've worked in Norway, it's only since they've found out that I've received the deduction for the tax credit that they are now asking for funds retroactively.

There was no prior mention of anything related to foreign tax either contractually or verbally.
You need to seek legal advice on this.
Im not sure you have given us the full info but from what I can make out you should still be paying Noggie tax a percentage maybe depending on how many days in N waters?
For example if you did 200 days on a qualifying vessel for the year you are claiming for and 50 of them were Noggie waters you would still pay them tax but your trips would count to your offshore days to claim UK SED.
Its the same for guys agency PAYE or Ltd company guys and why the Norwegian sector usually carries the extra on top of the day rate so after Noggie tax you should be roughly back at your UK day rate! It would only make a difference to your company if you had the Noggie uplift for the whole year and you were not there all the time. If you only worked in the N sector then your UK tax would be offset to Norway and you would not pay TWICE but it would be higher amount annually hence why most companies give you an Uplift to offset this otherwise whats the point taking a pay cut to work in Norway.
Hit 40 Hey presto Victor Meldrew or Rab C
I've worked in the Norwegian sector before, and the company has always paid any foreign tax accrued. It was never disclosed to me at any time that I would be responsible for paying my Norwegian taxes, myself, and they have always protected me from them. (This would be equivalent to taking the taxes out at source but providing an uplift to make up for it).

Now that I've qualified for the seafarer's, they are retroactively coming after the taxes they've paid on my behalf for that year.

I think this is unfair, because had I known, I could have chosen to work in Norway and still qualified for the credit. Also, other employees who didn't qualify for the credit don't have to pay the norwegian tax for the same work on the same jobs.
It's quite common for an employer to provide an uplift on salary/day rate to allow for the higher taxes in Norway. It does seem rather strange that they are now claiming back the tax from you because you are able to claim the seafarers tax relief. Unless it is within your contractual terms of employment I'm surprised they can do that legally.
Kind Regards
Steve White

Your Tax Office Ltd
+44 (0) 1438 940 944
What I find odd, is this....

If you were unable to claim seafarer tax I'm guessing they wouldn't bother.

Now you have claimed seafarer tax, at your expense, they want some back!

The way I see it, it's your tax claim, not theirs. It might be different if they claimed the tax back on your behalf and paid for the privilege, but I'm guessing that is not the case.

Get your ducks in a row legally. If they have no legal right to deduct from your salary tell them so. Then find another employer if they get difficult.
There was no prior mention of anything related to foreign tax either contractually or verbally.

Verbal agreements have no weight whatsoever.

As I have mentioned, you must be absolutely 100% sure that ALL documents relating to YOUR employment contract do not allow them to deduct anything. Read the small print.

If this is not mentioned then i would be inclined to research taking your employer to court, and then serve them with proceedings.

There is plenty of info on the inet.
I was on the kettle!

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