COMPANIES operating in the UK oil and gas sector could be incurring millions of pounds in unnecessary costs due to dormant companies in their groups, according to research.
Accountancy and business advice firm Deloitte looked at the legal group structures of FTSE 350 companies.
Judith Howson, an assistant director in Deloitte’s restructuring services team, said: “Our research across a sample of the largest groups in the UK oil and gas sector has shown that, on average, around 31% of a group structure is dormant, which equates to an average of 22 dormant subsidiaries per group, costing each one an estimated £66,000 annually.”
Deloitte said the high percentage of dormant subsidiaries could be due to restructures or mergers and acquisitions activity.
But it also warned that costs and time spent on these dormant entities would increase due to changes in the tax system.