Oil & Gas giant Wood declares on IR35 reforms

Oil & Gas giant Wood declares on IR35 reforms

Wood, the oil and gas company based in Aberdeen, have today notified all of their PSC contractors of their plans post April 2020.

Wood are currently working alongside tax consultancy Grant Thornton to review the status of all UK-engaged contractors and they aim to have this process completed by mid-December and the contractors notified early 2020.

A couple of key points are that Wood are not using the CEST tool to make these determinations and they are being conducted by the Wood managers, not a central function. This is good news as the managers will be more attuned to the working practices and therefore better able to make the important decisions.

If the contract is judged to be outside of the scope of IR35, then it will remain in place after April 2020 although there is an indication that this maybe under revised contractual terms. We expect this will most likely be under a Statement of Works type of arrangement.

If the contract is deemed inside IR35, the options are as you would expect: either apply for a staff position or move to agency PAYE where “the rate will be reduced recognising the costs to be borne by the Wood engaging company e.g. costs like employer NIC.” Interestingly, there doesn’t seem to be an umbrella option.

It’s good to see that Wood are taking the lead on this and there are definite positives to take from the announcement but, as ever, the devil will be in the detail, and this won’t become clear until the reviews are completed next month. But it’s definitely good news that the blanket approach is NOT being taken.

If you’re at all concerned how the IR35 reforms will affect you, please feel free to contact us through the usual channels. We are very keen to engage with as many PSC contractors as we possibly can at this pivotal time in the contractor community.