From April 2021, large and medium firms in the private sector that hire contractors will be responsible for determining their IR35 status rather than the contractors themselves as the Off-Payroll legislation takes effect. Whilst many oil firms will continue to hire contractors off-payroll, we are seeing some taking a risk-averse approach and issuing blanket bans on hiring contractors who work through their own personal service companies, insisting instead that they all go PAYE, either directly or via agency payroll.
With the UK oil and gas market reeling from COVID-19, it’s clear that the decisions made by businesses in this industry as they focus on a recovery in the coming months need to be strategic, measured and informed.
The oil and gas downturn of approximately five years ago where the price of a barrel of oil dropped to less than $30 led to thousands of employees in the sector being made redundant. Those who wished to remain in the sector had to be patient before ultimately securing further employment.
The UK Government is pressing ahead with delayed changes to off-payroll working rules, known as IR35, despite peers having urged it to “completely rethink” its plans.
There has been a lot of discussion over the last 12 months about how the changes to Off-Payroll rules will impact the UK Private sector, and I have read with great interest some of the comments and foresight on what IR35 is and what it will mean to the UK contracting workforce.
A House of Lords committee has called on the government to “completely rethink” a controversial tax reform which will have sweeping implications for North Sea contractors.
At least one North Sea operator is going ahead with a “death knell” tax change affecting self-employed contractors in the oil and gas industry, despite the UK Government postponing its introduction.
by Charlotte Edwards, employment taxes senior manager & head of IR35, AAB
As one of the most controversial pieces of legislation affecting the flexible workforce, IR35 is never far from the headlines and there have been campaigns and protests to try and halt the reforms. That has now been successful as Contractors celebrated their success last night.
Oil and gas contractors are set to shun the North Sea sector rather than join supermajors after the introduction off-payroll working (IR35) tax changes next month.
Jake Molloy, RMT Union regional organiser for the north-east of Scotland, last night said he was “not surprised” by the news that contractors are rejecting the PAYE offers by oil firms.
Energy Voice has been running regular articles about the pending HMRC changes that will see the current IR35 arrangement altered to prevent, we are told, tax avoidance.
Aberdeen-based consultancy Hunter Adams recently convened 40 senior HR leaders from the oil and gas sector to debate the practicalities around the implementation of the IR35 reforms, due on April 6, 2020.
A tax expert has described the government’s five-week review of incoming IR35 legislation as “nowhere near long enough” to fully consider its complex range of issues.
