Owners of British rigs and offshore vessels are being urged to back Aberdeen-headquartered Dolphin Drilling in its bid for a Supreme Court challenge.
The firm has been locked in a legal battle with HMRC for years, and recently lost a Court of Appeal hearing which it says will have implications for the operation of hundreds of rigs and vessels in the UK sector.
Dolphin Drilling (OSLO: DDRIL) has vowed to take the case to the Supreme Court, and is now seeking backing of fellow companies.
A memo has been sent out to members of the British Rig Owners’ Association and the UK Chamber of Shipping asking companies to back the move for a Supreme Court hearing.
The note, from the Chamber’s policy manager Robert Merrylees, states that the tax position for vessel owners and mobile offshore units operating in the UK “is now highly uncertain”.
The Chamber said it has carried out high-level research that finds there’s “significant and far-reaching consequences” for the 495 offshore vessels and 95 offshore units operating in the UK.
“Given the impact the decision may have on member operators, BROA/the UK Chamber is considering filing a statement with the Court which reflects these concerns,” the memo states.
Members are this week expected to have submitted their views in response ahead of a statement being prepared for the Supreme Court panel.
The Chamber notes that, although Dolphin is seeking to overturn the Court of Appeal decision, it is the potential to raise a point of wider importance for the sector which could see the case go to the Supreme Court.
Tax case
The Court of appeal hearing in December sets a new precedent with wide implications on what deduction claims can be made in the sector under corporation tax law.
This case stems from a long-running battle between HMRC and Dolphin starting in 2014 after its Borgsten Dolphin rig was hired by TotalEnegies in the North Sea.
The Court of Appeal deemed accommodation services on the rig to to be more than “incidental” to the wider contract – something with implications for services being offered across the sector.
Legal experts have said the point of law would benefit from a review from the country’s highest court.
Read more below:
Dolphin Drilling to go to Supreme Court
Dolphin Drilling has vowed to push for a Supreme Court hearing.
CFO Stephen Cox said in December: “The net effect is a potential broadening of the tax net, and it could capture others assets, other firms into this and definitely broadens the remit HMRC has, which is a big negative for the industry, in my view.
“Obviously we’re going to take a position with Dolphin Drilling that we completely disagree with this, but we are aware other people are looking at this case with great interest in terms of what potential impact that has across the industry.”
