LRD guides and handbook August 2014

Casualisation at work - a guide for trade union reps

Chapter 4

Off-shore intermediaries — RMT backs changes to the law

[ch 4: page 29]

In April 2014, the government introduced separate legislation to target abuses involving the use of off-shore intermediaries to avoid Employer’s National Insurance. Employers tried to escape their obligations by using chains of intermediaries, with the labour provider at the top of the supply chain situated outside the UK. From April 2014, new laws fix the liability for PAYE tax and National Insurance on the intermediary closest in the chain to the business that actually uses the worker, regardless of the offshore status of the labour provider at the top of the chain.

One of the main targets of this reform was the oil and gas sector. In its response to government consultation on the proposed change, the RMT union estimated the annual losses to HMRC from this practice at over £150 million in the offshore oil and gas sector alone.