Offshore contractors who are transferring employees to “shell” companies in tax havens are depriving the NHS of millions of pounds a year, union leaders have warned.
OILC, the trade union for offshore oil and gas workers, said 17 contractors have set up tax-avoidance schemes to escape liability for employers’ National Insurance contributions, which amount to 12.8 per cent (gross) of their payroll.
The union fears that the practice is spreading and that millions more will be lost to the National Insurance Fund if action is not taken.
Jake Molloy, general secretary of the union, told the Herald newspaper in Scotland: “Tens of millions of pounds are being lost to the National Insurance Fund.
“Chancellor Gordon Brown’s 2002 budget announced £90bn more would be invested in the National Health Service.
“The source of this new money, he said, would be National Insurance contributions – the very fund deliberately deprived of resources by the offshore employers.
“That any employer should conspire not to pay National Insurance contributions is reprehensible. That it is offshore employers is utterly unforgivable,” Molloy added.
A spokesman for the Offshore Contractors’ Association said only one of its members, which was foreign-registered, out of more than 60 operated the scheme.
“Our understanding is that it is perfectly legal and does not disadvantage employees in any way, or have any adverse impact on their statutory employment rights.”