Plans to end offshore tax breaks fuel union fury
Move will hit the UK’s ability to provide workers for its maritime clusters, argue unions
Sandra Speares, 30 September 2008 Lloyds List
SEAFARING unions are calling for urgent action to head off plans by the UK tax authorities to withdraw tax breaks to members in the offshore industry.
Andrew Linington, head of campaigns & communications at officers’ union Nautilus, said that the latest moves by HM Revenue & Customs have caused “unprecedented outrage” among members of the officers union.
The tax office has announced plans to withdraw Seafarers Earnings Deduction for construction, construction support, well service and dive support vessels, a step that, according to the RMT union, will result in a 20% loss on overall earnings for seafarers employed on these vessels.
The RMT said that employers can expect seafarers to be looking for correspondingly higher wages to compensate for the loss.
Both the RMT and Nautilus believe that the tax authorities’ attitude runs counter to statements by the Department for Transport, in which it said it wanted to encourage an increase in UK seafarers.
Both unions have written to shipping minister Jim Fitzpatrick and the Chancellor Alistair Darling to protest about the changes. The UK Chamber of Shipping is also planning to write.
At issue is what is defined as a ship for the purposes of the tax break.
According to Mr Linington, the tax concession was originally introduced after the Gulf War with the intention of ensuring a strategic supply of UK seafarers. “The Revenue can’t seem to get it into its head that that is why [the concession] is there,” Mr Linington said.
The issue of what is classed as a ship is an ongoing debate, not only at EU level but in the context of the UK’s tonnage tax regime. According to UK Chamber of Shipping director-general Mark Brownrigg, the trade organisation was “at one” with the unions in protesting over the reclassification of vessels considered to be ships for the purposes of the tax concession.
“We will act in concert over any specialist ships that may be affected,” Mr Brownrigg said. The move could affect the UK’s ability to provide seafarers for the UK maritime clusters, with “illogical and potentially damaging results," he warned.