TaxCorporate TaxTaxman sets sights on North Sea workers’ NI loophole

Taxman sets sights on North Sea workers' NI loophole

Storm brewing for oil industry as HMRC may clamp down on national insurance loophole

The taxman is probing a tax loophole which has reportedly kept hundreds of
millions of pounds in national insurance contributions out of the public
coffers.

The scheme, which has been used by scores of companies according to
The
Times
is depriving the Treasury of as much as £70m a year.

By treating oil rig workers as sailors, employers are able to avoid paying
their share of UK national insurance contributions, cutting their staffing costs
by as much as 12 per cent.

Up to one third of the 30,000 workers in the North Sea oil industry are
thought to be affected by the practice, which exploits an area of UK tax law
known as the “Mariners’ Dispensation”.

An HMRC spokesman said: “We are looking into it. This could be something that
we intend to close down.”

Further reading:

Brown
and Darling extend oil tax olive branch

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