North Sea oil workers face £200 tax on each rig flight

A LEADING industrialist has warned that some North Sea helicopter companies could be forced to operate outside Britain because of a coalition government threat to impose a charge of almost £200 per passenger on every offshore flight.

Britain's oil and gas industry, already reeling from the impact of Chancellor George Osborne's 10 billion "tax grab", has now reacted furiously to a Treasury proposal to put offshore helicopter flights in the same tax bracket as commercial private jets.

Industry leaders fear that offshore workers could end up facing a 186 charge every time they fly to and from a North Sea installation - the same as the highest rate for passengers on private jets - resulting in additional costs of 165 million year to the industry.

Hide Ad
Hide Ad

There are an estimated 900,000 passenger journeys involving oil workers travelling in and out of Aberdeen's heliport alone each year.

Westminster politicians have launched a consultation into the proposals, stating that there is a "strong" argument for extending air passenger duty to the thousands of private passenger aircraft, including helicopters, which are currently exempt from the charge. Robert Paterson, the health and safety director of Oil and Gas UK, the pan industry trade body, condemned the proposals.

He said: "The industry is absolutely staggered. This could cost in excess of 165m a year on top of the controversial tax increase and it is something that potentially makes our high cost basin increasingly unattractive.

"It is wholly unwarranted and indeed could push some helicopter operators to start operating on the Continent where they are not penalised by these high taxes."

Mr Paterson warned: "In a high cost basin such as the UK, where staying competitive with other regions around the world is already a huge challenge, the last thing this industry needs is an additional cost burden of this magnitude.

"We believe that this is an unjustified cost. The implication in the Treasury document that helicopter flights to offshore installations in any way equate with 'business jet flights' is surprising to say the least."

He added: "It's not as if people can use alternative means of transport getting to and from offshore installations. Boat transfer simply does not work and it's highly ineffective and much more dangerous than helicopter transit.

"The transport of workers to offshore installations is anything but like a business jet flight."

Hide Ad
Hide Ad

Stewart Hosie, the SNP's Westminster Treasury spokesman, claimed: "This is another disgraceful raid on Scotland's offshore industry that will undermine jobs and investment and push up prices for energy customers. Control over APD (Air Passenger Duty) should be transferred from Westminster to the Scottish Parliament, as recommended by the Calman Commission, so that the Scottish Government can work to protect jobs in one of Scotland's great industries."

• Comments on this article have been suspended due to repeated infringements of our terms and conditions.A Treasury spokesman stressed that no decision had been made.

He said: "At Budget 2011, the government launched a consultation on the structure of Air Passenger Duty, including plans to extend the duty to aircraft with an authorised take-off weight in excess of 5.7 tonnes."

Consultation closes on 17 June.