When Chancellor George Osborne announced a series of tax cuts for the oil and gas industry in his 2015 Budget, it was welcomed by those who represent contractors and freelancers who work in the sector. The Association for Independent Professionals and the Self Employed have expressed their relief that the government has addressed the potentially flagging industry by encouraging investment in the sector, particularly in the North Sea.
The cuts included a reduction in the supplementary charge from 30 per cent to 20 per cent, and the Petroleum Revenue Tax will be reduced from 50 per cent to 35 per cent. These represent significant savings for the oil and gas industry which are expected to boost the sector’s coffers by around £1.3 billion. Gary Sharp, an IPSE director based in Scotland, has described the measures as ‘a ray of sunshine’ compared to the gloomy outlook that has been the overwhelming feeling about the oil and gas industry over recent months.
In the run-up to the election, many organisations were at pains to point out to the government that the oil and gas industry was suffering due to the reduction in the price per barrel of oil and the lack of investment in the sector. A number of experts were keen to point out that the North Sea represents a significant opportunity for investment, especially given that there is a significant amount of infrastructure already in place which could be utilised to keep costs down and ensure that previous spending is capitalised upon. The importance of securing the UK’s energy supplies and ensuring as much independence as possible has long been considered a priority, especially since we became a net energy importer in 2004.
The potential for increasing research, development and investment in the oil and gas industry would have a beneficial effect on contractors with specialist expertise in the sector. The oil and gas industry is largely driven by independent professionals who tend to be highly skilled and have specialist expertise which is vital to the success of any projects which are planned.
While the general public might have been pleased to see the price of oil falling, the effects on the industry have been significant and have caused knock-on effects to workers in the sector. Andy Samuel, Chief Executive of the Oil and Gas Authority has welcomed the measures introduced in the Budget and Oil and Gas UK have praised the moves as laying ‘strong foundations’ for promoting regeneration of the industry in the North Sea.
If you are a contractor hoping to capitalise on the measures introduced in the Budget, then our resources can help you to make the most of the opportunities available to you. We have a take-home pay calculator which could help you to work out what kind of income you can expect if your rates increase and a guide to expenses which will allow you to ascertain what you can and can’t claim. Our guides to contractor tax and IR35 are also useful tools for anyone who wants a better understanding of their financial position.
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