Gas & oil recruiters to gain from Osborne’s Budget
18 March 2015
Recruiters for the UK gas & oil sector were among the big winners as Chancellor George Osborne unveiled tax incentives for the North Sea based industry in his Budget 2015 today.
Wed, 18 Mar 2015
Recruiters for the UK gas & oil sector were among the big winners as Chancellor George Osborne unveiled tax incentives for the North Sea based industry in his Budget 2015 today.
The chancellor also added tax evaders and those who help them would now face stiffer criminal penalties.
Against the backdrop of a record number of people in work and better than expected growth, he announced several key points — a clampdown on tax evaders; review of business rates; tax relief for the oil & sector — that could be significant for the recruitment industry.
Tax evasion
Osborne announced the government would stop employment intermediaries exploiting the tax system to reduce their own costs, “by clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence – while we protect those genuinely self-employed”.
Tom Hadley, director of policy and professional services at the Recruitment and Employment Confederation (REC), said such a clampdown was “critical to ensuring a level playing field for recruiters who play by the rules”.
“Progress here is long overdue and such a public commitment to clamp down on agencies and umbrella companies that exploit travel and subsistence schemes is very welcome news,” he said.
Freelance & Contractor Services Association (FCSA) chief executive Julia Kermode told Recruiter the clampdown was welcome. She expected consultation on any clampdown to take place later this year.
Matthew Sanders, chief executive of Brookfield Rose, parent group to temporary labour procurer de Poel and payroll company Paraplus, also welcomed the announced clampdown.
He said in a statement umbrella companies were all “being tarred with the same brush” due to the actions of “a small minority” of unethical operators.
However, Simon McVicker, director of policy and external affairs at the Association of Independent Professionals and the Self Employed (IPSE) urged caution in any such clampdown. He said if not “handled carefully” it could be “very damaging for the UK’s smallest businesses”.
Osborne did not explain how the clampdown would happen but did mention new criminal offences for tax evasion and new penalties for professionals who help tax evaders.
Further details on the new offences are expected to be published tomorrow [March 19].
“Let the message go out: this country’s tolerance for those who will not pay their fair share of taxes has come to an end,” Osborne said.
Oil & Gas
To support the UK’s oil & gas sector, the chancellor committed to cutting Petroleum Revenue Tax from 50% to 35%. He also cut the Supplementary Charge in respect of profits from oil and gas production in the UK and UK Continental Shelf from 30% to 20%, and is backdating it to the beginning of January.
Graeme Lewis, director at oil & gas staffing specialist Air Energi, told Recruiter the chancellor’s move is vital to ensuring young people see oil & gas as an attractive sector.
“Britain has produced a large number of talented people who have gone onto enjoy careers both in the UK and overseas,” said Lewis.
“That will continue as long as there is a viable North Sea industry for people to cut their teeth in.
“The skills and experience and cultural fit of people from Britain, particularly those who have experience of the North Sea sector are very much in demand in all parts of the globe and that is why this is significant,” he added.
Andrew Speers, managing director at oil & gas staffing specialist Petroplan, agreed, adding: “Providing businesses involved in this sector with additional support in the form of this significant tax break will support the continued growth of talent for a global industry.
“The required talent may not have been attracted to the region without this supportive fiscal arrangement."
David Spencer-Percival, chief executive of energy recruitment firm Spencer Ogden, said: “This is the kick start that the North Sea oil industry needed. George Osborne’s £1.3 billion support is the first, vital step in reversing mounting job losses.
“The situation was becoming dire. We had gone from a skills shortage to an influx of jobless top talent. This is now being addressed.
“The fact is, without exploration now, North Sea oil jobs will dry up long before the oil sources do.”
Meanwhile, CBI Director-General John Cridland claimed the move would allay investment concerns among companies in the sector.
“The oil and gas industry, which supports 450,000 UK jobs and is a major contributor to GDP, has been given a much-needed boost with the reduction to the supplementary charge and other incentives. This will help address concerns over job losses and investment freezes, but pressures remain due to low oil prices.”
Business rates
Addressing business rates, the chancellor said the government has reached a provisional agreement to enable Greater Manchester to retain 100% of additional growth in local business rates with the same deal also planned for Cambridge.
Osborne also revealed a “major” review of Business Rate tax, welcomed by retail recruiter Peter Burgess at Retail Human Resources who said excessive charges for business rates is damaging job creation in the retail sector.
“We need a significant reduction in business rates for all town centres if they are to revive,” he said. “Otherwise there needs to be a concerted effort to change the use of some retail areas, perhaps to residential, otherwise our town centres are to be condemned to having more charity shops and empty buildings.”
The REC’s Hadley added the issue of business rates is an area the organisation had been lobbying on in connection with The British Retail Consortium.
“The fact that Manchester and Cambridge will be able to retain 100% of their business rates sets an important precedent for further local and regional devolution,” Hadley said.
Osborne announced other measures likely to be of interest to recruiters, including the abolishment of Class 2 National Insurance contributions for all self-employed, abolishing annual tax returns; cutting corporation tax to 20%; abolishing National Insurance for employing under 21s from April and for employing young apprentices from next April; significant investment leading to job creation in engineering, science, creative, transport, energy sectors.
The chancellor also added tax evaders and those who help them would now face stiffer criminal penalties.
Against the backdrop of a record number of people in work and better than expected growth, he announced several key points — a clampdown on tax evaders; review of business rates; tax relief for the oil & sector — that could be significant for the recruitment industry.
Tax evasion
Osborne announced the government would stop employment intermediaries exploiting the tax system to reduce their own costs, “by clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence – while we protect those genuinely self-employed”.
Tom Hadley, director of policy and professional services at the Recruitment and Employment Confederation (REC), said such a clampdown was “critical to ensuring a level playing field for recruiters who play by the rules”.
“Progress here is long overdue and such a public commitment to clamp down on agencies and umbrella companies that exploit travel and subsistence schemes is very welcome news,” he said.
Freelance & Contractor Services Association (FCSA) chief executive Julia Kermode told Recruiter the clampdown was welcome. She expected consultation on any clampdown to take place later this year.
Matthew Sanders, chief executive of Brookfield Rose, parent group to temporary labour procurer de Poel and payroll company Paraplus, also welcomed the announced clampdown.
He said in a statement umbrella companies were all “being tarred with the same brush” due to the actions of “a small minority” of unethical operators.
However, Simon McVicker, director of policy and external affairs at the Association of Independent Professionals and the Self Employed (IPSE) urged caution in any such clampdown. He said if not “handled carefully” it could be “very damaging for the UK’s smallest businesses”.
Osborne did not explain how the clampdown would happen but did mention new criminal offences for tax evasion and new penalties for professionals who help tax evaders.
Further details on the new offences are expected to be published tomorrow [March 19].
“Let the message go out: this country’s tolerance for those who will not pay their fair share of taxes has come to an end,” Osborne said.
Oil & Gas
To support the UK’s oil & gas sector, the chancellor committed to cutting Petroleum Revenue Tax from 50% to 35%. He also cut the Supplementary Charge in respect of profits from oil and gas production in the UK and UK Continental Shelf from 30% to 20%, and is backdating it to the beginning of January.
Graeme Lewis, director at oil & gas staffing specialist Air Energi, told Recruiter the chancellor’s move is vital to ensuring young people see oil & gas as an attractive sector.
“Britain has produced a large number of talented people who have gone onto enjoy careers both in the UK and overseas,” said Lewis.
“That will continue as long as there is a viable North Sea industry for people to cut their teeth in.
“The skills and experience and cultural fit of people from Britain, particularly those who have experience of the North Sea sector are very much in demand in all parts of the globe and that is why this is significant,” he added.
Andrew Speers, managing director at oil & gas staffing specialist Petroplan, agreed, adding: “Providing businesses involved in this sector with additional support in the form of this significant tax break will support the continued growth of talent for a global industry.
“The required talent may not have been attracted to the region without this supportive fiscal arrangement."
David Spencer-Percival, chief executive of energy recruitment firm Spencer Ogden, said: “This is the kick start that the North Sea oil industry needed. George Osborne’s £1.3 billion support is the first, vital step in reversing mounting job losses.
“The situation was becoming dire. We had gone from a skills shortage to an influx of jobless top talent. This is now being addressed.
“The fact is, without exploration now, North Sea oil jobs will dry up long before the oil sources do.”
Meanwhile, CBI Director-General John Cridland claimed the move would allay investment concerns among companies in the sector.
“The oil and gas industry, which supports 450,000 UK jobs and is a major contributor to GDP, has been given a much-needed boost with the reduction to the supplementary charge and other incentives. This will help address concerns over job losses and investment freezes, but pressures remain due to low oil prices.”
Business rates
Addressing business rates, the chancellor said the government has reached a provisional agreement to enable Greater Manchester to retain 100% of additional growth in local business rates with the same deal also planned for Cambridge.
Osborne also revealed a “major” review of Business Rate tax, welcomed by retail recruiter Peter Burgess at Retail Human Resources who said excessive charges for business rates is damaging job creation in the retail sector.
“We need a significant reduction in business rates for all town centres if they are to revive,” he said. “Otherwise there needs to be a concerted effort to change the use of some retail areas, perhaps to residential, otherwise our town centres are to be condemned to having more charity shops and empty buildings.”
The REC’s Hadley added the issue of business rates is an area the organisation had been lobbying on in connection with The British Retail Consortium.
“The fact that Manchester and Cambridge will be able to retain 100% of their business rates sets an important precedent for further local and regional devolution,” Hadley said.
Osborne announced other measures likely to be of interest to recruiters, including the abolishment of Class 2 National Insurance contributions for all self-employed, abolishing annual tax returns; cutting corporation tax to 20%; abolishing National Insurance for employing under 21s from April and for employing young apprentices from next April; significant investment leading to job creation in engineering, science, creative, transport, energy sectors.
