Rising costs and poor guidance are the two main issues affecting oil and gas companies after changes to National Insurance Contributions (NICs) for offshore workers came in to effect.
The professional services firm KPMG estimates the new rules, which sees companies with employees working under the employment of an offshore intermediary must now contribute NICs on their behalf, will cost the industry £100million.
In a recent poll of affected businesses, 80% said the new rules had increased compliance costs. Meanwhile, businesses remain uncertain on exactly how the legislation affects them, with 72% describing the level of guidance given by the relevant authorities as inadequate.
Martin Findlay, a partner in KPMG’s Aberdeen office said: “There are clear concerns that companies are unsure of how these new rules should be applied, suggesting the recent changes may have been rushed through.
“The new rules will increase the cost burden on employers at a time when margins are already being squeezed.
“The survey also clearly highlights the desire from businesses in the north-east for a more simplified tax regime, which they currently see as unnecessarily complex.”
Changes for continental shelf workers came in to effect on 6 April.
Recommended for you
