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The Rt Hon Malcolm Bruce MPLiberal Democrat MP for Gordon |
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North Sea tax ruling "beggars belief" - Bruce and Smith
September 30, 2008 9:00 AM
MPs criticise decision which could see seafarers working on remote operated vehicles (ROV) and dive support vessels pay full income tax
Lib Dem MPs Malcolm Bruce and Sir Robert Smith have hit out at changes to North Sea tax rules that could see thousands of offshore workers face large tax bills.
HM Revenue and Customs officials recently ruled that some vessels that work offshore should no longer be classified as ships. This means that seafarers working on remote operated vehicles (ROV) and dive support vessels, amongst others, will no longer be able to qualify for seafaring tax concessions.
The North-East MPs have been contacted by many constituents worried at the impact that this will have on their livelihoods and are seeking a ministerial meeting for all those MPs with a concerned interest.
Commenting, Malcolm Bruce, Liberal Democrat MP for Gordon said:
"This is a quite breathtaking ruling. The vessels in question sail on the high seas and are crewed by personnel with seaman's cards and discharge books. How HM Revenue and Customs could consider this and come to the conclusion that these are not, in fact, ships is beyond me.
"This move is potentially devastating for many North Sea workers. Not only will they face increased tax bills this year, but the change has been backdated to April 2007, so they have been denied the opportunity to mitigate their liabilities.
"The allowance rules were brought in to encourage people to make a career at sea. These changes will do nothing to encourage new entrants into a seafaring career, and everything to encourage those already at sea to seek employment elsewhere."
Sir Robert Smith MP, Liberal Democrat MP for Aberdeenshire West and Kincardine, and Vice-Chair of the All-Party Offshore Oil and Gas group, added:
"I have written to the Chancellor highlighting this serious issue. It is crucial that he intervenes to restore the original intention of theses rules to encourage recruitment.
The North East of Scotland, and Westhill in particular, are seen as world leaders in subsea engineering, which requires the services of these professionals. It is crucial if we are to build on our expertise that the taxman does not frighten away new recruits and force out existing employees."
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