Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Oil & gas contractors face “perfect storm” of oil price crash and tax hit

BP Chairman Carl-Henric Svanberg today praised his team’s “seriously impressive” performance amid the oil downturn.
BP Chairman Carl-Henric Svanberg today praised his team’s “seriously impressive” performance amid the oil downturn.

Tax rises and job cuts have “irrevocably changed” the landscape for North Sea oil and gas contractors, leading business figures have predicted.

Specialists from Johnston Carmichael, Aberdein Considine, Prodrill and Caunce O’Hara – firms which all work closely with the industry’s freelance workers – say trading conditions for their clients is becoming increasingly challenging due to a “perfect storm of economic forces and political interference”.

Contractors have borne the brunt of the 5,500 energy job losses following the decline in Brent Crude prices.

Weir Group added 400 more jobs cuts yesterday and up to 20,000 more positions are expected to go before 2020 as companies adjust to lower prices and new fields becoming harder to find and commercially exploit.

The employment blow has been compounded by a raft of tax increases announced in a targeted attack by George Osborne earlier this year.

A special conference – ‘The Changing Face of Oil and Gas Contracting’ – has been arranged by the four businesses to help workers deal with the changes.

The event, being held in Aberdeen on November 17, will bring together experts in jobs, taxation, wealth management and insurance to help contractors plan for the new landscape.

“Working conditions for North Sea contractors have changed irrevocably during the course of 2015,” a spokesman for the organisers said.

“Over the past 12 months, most have seen an erosion of employment opportunities. They also have to deal with what appears to be a clear attempt from the Chancellor to force workers out of contracting and into staff jobs.

“This perfect storm of economic forces and political interference has been a hammer blow to many in the industry.

“But there are still opportunities.  Many of the changes – jobs, IR35, changes to dividend taxation, employment intermediaries legislation, wealth and pensions – will be among the issues discussed at the short conference.

“The interactive event – during which delegates can ask anything they want to know about the industry – is free of charge.

North Sea operators, including Shell, BP, Chevron and ConocoPhillips, have all announced cuts, a trend that has raised concerns about an emerging skills gap.

North Sea oil companies have been particularly hard hit by the near 55% decline in the oil price since June 2014, as they were already facing some of the industry’s  highest operating costs in one of the world’s most mature basins.

The oil and gas sector employs around 375,000 people and remains an important source of tax revenue, despite those receipts dropping.

Nevertheless, contractors also look certain to lose out on thousands of pounds of income due to changes in dividend tax next year.

Self-employed contractors will pay an additional £2,000 in tax for an £80,000 contract under new rules.

In his second raid, contractors who are the sole employee of their own limited company will be prevented from claiming the NICs Employment Allowance. At present, contractors can offset the £2,000 allowance against employers’ NIC arising on ordinary salary.

In a third blow, he has also decided to proceed with the March 2015 Budget plan to ban tax relief on travel and subsistence expenses.

Seats at the free conference, being held at the Park Inn by Radison on Justice Mill Lane, Aberdeen, can be reserved by searching for ‘Changing Face’ at eventbrite.co.uk.

Already a subscriber? Sign in

[[title]]

[[text]]