Cyclic Hotline
22nd Nov 2023, 14:10
https://www.energyvoice.com/oilandgas/north-sea/541784/aberdeens-offshore-helicopter-services-facing-10m-hmrc-probe/OIL & GAS (https://www.energyvoice.com/category/oilandgas/) / NORTH SEA (https://www.energyvoice.com/category/oilandgas/north-sea/) Aberdeen’s Offshore Helicopter Services facing £10m HMRC probeBy Mathew Perry (https://www.energyvoice.com/author/mathewperry/) | 22/11/2023, 7:00 am
Aberdeen based Offshore Helicopter Services (OHS) UK is facing an HMRC investigation into its tax affairs with the company potentially liable for £10 million in repayments.
If HMRC requires OHS to pay the full amount alleged to be outstanding there is “significant doubt” as to its ability to “continue as an ongoing concern”, according to new financial filings by the company.
The HMRC investigation relates to the alleged underpayment of custom duties and import value added tax (VAT) on imports made between September 2017 and March 2020. During that period OHS was owned by Babcock International, however the company has had two ownership changes since then.
Babcock sold OHS to Texas-based CHC Helicopters (https://www.energyvoice.com/oilandgas/north-sea/346820/babcock-completes-10m-sale-of-aberdeen-headquartered-helicopter-business-to-chc/) in 2021, however just a year later the UK’s competition watchdog forced the American firm to sell off the Aberdeen business (https://www.energyvoice.com/markets/416397/breaking-chc-helicopter-ordered-to-sell-babcock-north-sea-business-by-competition-authorities/). After 22 months of uncertainty, in April this year CHC Helicopters sold OHS to South Africa based Ultimate Aviation Group (https://www.energyvoice.com/oilandgas/494203/former-babcock-helicopter-business-takes-off-with-new-south-african-owner/). Now it appears the future of the North Sea helicopter operator, which employs approximately 370 people, is up in the air once again. OHS faces £10m HMRC liabilityA spokesperson for OHS told Energy Voice: “We believe the company has a strong defence and will keep staff fully updated throughout the legal process.
“Tax and legal advisors have been appointed and are currently preparing a multi-faceted defence, on various grounds, in respect of this matter.”
According to the OHS annual report for the year ending March 31, 2022, OHS received demands from HMRC in October this year relating to the alleged outstanding tax payments. If OHS is unsuccessful in defending the HMRC case, the report states “the liability inclusive of interest or penalties would be in the region of £10m”.
https://wpcluster.dctdigital.com/wp-content/uploads/sites/4/2023/01/WMX_160123_3-8-1l6uoydi2-846x564.jpg (https://wpcluster.dctdigital.com/wp-content/uploads/sites/4/2023/01/WMX_160123_3-8-1l6uoydi2.jpg)
© Supplied by Image: Wullie Marr /A CHC Helicopter pictured in January 2023.
Offshore Helicopter Services was sold to Ultimate Aviation Group by CHC in April. Supplied by Image: Wullie Marr / DC Thomson Date; 16/01/2023In these circumstances, OHS will “need to obtain additional finance and/or reach agreement with HMRC regarding an instalment repayment plan, neither of which are currently in place”.
“As a result of this matter, the directors consider that there is a material uncertainty that may cast significant doubt over the Company’s ability to continue as an ongoing concern,” the report continues.
The report said the matter relates to a “complex set of circumstances given two successive changes in the Company’s ownership” since August 2021.
HMRC declined to comment on the matter.OHS turbulence continuesThe HMRC investigation continues a turbulent period for OHS in the years since its sale by Babcock. Following the sale of the company to Ultimate Aviation Group (https://www.facebook.com/UltimateAviationsa/?locale=en_GB), the South African business invested in two new helicopters for its North Sea fleet. Ultimate Aviation chief executive officer Shaun Roseveare told Energy Voice at the time there was “a lot in the pipeline” ahead in terms of investment for OHS.
OHS managing director Paul Kelsall also described a sense of relief as the sale to Ultimate Aviation looked to be ending “22 months of uncertainty”.
“There are no planned layoffs. To the contrary, we are going to be aggressively chasing more business,” Mr Kelsall said in April this year.
https://wpcluster.dctdigital.com/energyvoice/wp-content/uploads/sites/4/2019/08/5W7A2584-846x564.jpg (https://wpcluster.dctdigital.com/energyvoice/wp-content/uploads/sites/4/2019/08/5W7A2584.jpg)
As Babcock, now known as OHS, operated S92 “We’re probably going be recruiting in the near future.”
However, just four months later in August the North Sea helicopter operator confirmed its decision to reduce staffing levels (https://www.energyvoice.com/oilandgas/522385/offshore-helicopter-services-job-cuts/) due to a “tough economic climate, as well as the fallout from Government decisions around the windfall tax, and lower than normal client activity levels.”
The company, which bases its operations in Dyce, said customer activity had fallen by 15 to 20% year-on-year.
OHS did not disclose the number of jobs cut.
However, there was better news for the company later that month after OHS announced a five-year contract extension with Serica Energy (https://www.energyvoice.com/oilandgas/525247/offshore-helicopter-services-lands-five-year-deal-amid-turbulent-market-conditions/).
Aberdeen based Offshore Helicopter Services (OHS) UK is facing an HMRC investigation into its tax affairs with the company potentially liable for £10 million in repayments.
If HMRC requires OHS to pay the full amount alleged to be outstanding there is “significant doubt” as to its ability to “continue as an ongoing concern”, according to new financial filings by the company.
The HMRC investigation relates to the alleged underpayment of custom duties and import value added tax (VAT) on imports made between September 2017 and March 2020. During that period OHS was owned by Babcock International, however the company has had two ownership changes since then.
Babcock sold OHS to Texas-based CHC Helicopters (https://www.energyvoice.com/oilandgas/north-sea/346820/babcock-completes-10m-sale-of-aberdeen-headquartered-helicopter-business-to-chc/) in 2021, however just a year later the UK’s competition watchdog forced the American firm to sell off the Aberdeen business (https://www.energyvoice.com/markets/416397/breaking-chc-helicopter-ordered-to-sell-babcock-north-sea-business-by-competition-authorities/). After 22 months of uncertainty, in April this year CHC Helicopters sold OHS to South Africa based Ultimate Aviation Group (https://www.energyvoice.com/oilandgas/494203/former-babcock-helicopter-business-takes-off-with-new-south-african-owner/). Now it appears the future of the North Sea helicopter operator, which employs approximately 370 people, is up in the air once again. OHS faces £10m HMRC liabilityA spokesperson for OHS told Energy Voice: “We believe the company has a strong defence and will keep staff fully updated throughout the legal process.
“Tax and legal advisors have been appointed and are currently preparing a multi-faceted defence, on various grounds, in respect of this matter.”
According to the OHS annual report for the year ending March 31, 2022, OHS received demands from HMRC in October this year relating to the alleged outstanding tax payments. If OHS is unsuccessful in defending the HMRC case, the report states “the liability inclusive of interest or penalties would be in the region of £10m”.
https://wpcluster.dctdigital.com/wp-content/uploads/sites/4/2023/01/WMX_160123_3-8-1l6uoydi2-846x564.jpg (https://wpcluster.dctdigital.com/wp-content/uploads/sites/4/2023/01/WMX_160123_3-8-1l6uoydi2.jpg)
© Supplied by Image: Wullie Marr /A CHC Helicopter pictured in January 2023.
Offshore Helicopter Services was sold to Ultimate Aviation Group by CHC in April. Supplied by Image: Wullie Marr / DC Thomson Date; 16/01/2023In these circumstances, OHS will “need to obtain additional finance and/or reach agreement with HMRC regarding an instalment repayment plan, neither of which are currently in place”.
“As a result of this matter, the directors consider that there is a material uncertainty that may cast significant doubt over the Company’s ability to continue as an ongoing concern,” the report continues.
The report said the matter relates to a “complex set of circumstances given two successive changes in the Company’s ownership” since August 2021.
HMRC declined to comment on the matter.OHS turbulence continuesThe HMRC investigation continues a turbulent period for OHS in the years since its sale by Babcock. Following the sale of the company to Ultimate Aviation Group (https://www.facebook.com/UltimateAviationsa/?locale=en_GB), the South African business invested in two new helicopters for its North Sea fleet. Ultimate Aviation chief executive officer Shaun Roseveare told Energy Voice at the time there was “a lot in the pipeline” ahead in terms of investment for OHS.
OHS managing director Paul Kelsall also described a sense of relief as the sale to Ultimate Aviation looked to be ending “22 months of uncertainty”.
“There are no planned layoffs. To the contrary, we are going to be aggressively chasing more business,” Mr Kelsall said in April this year.
https://wpcluster.dctdigital.com/energyvoice/wp-content/uploads/sites/4/2019/08/5W7A2584-846x564.jpg (https://wpcluster.dctdigital.com/energyvoice/wp-content/uploads/sites/4/2019/08/5W7A2584.jpg)
As Babcock, now known as OHS, operated S92 “We’re probably going be recruiting in the near future.”
However, just four months later in August the North Sea helicopter operator confirmed its decision to reduce staffing levels (https://www.energyvoice.com/oilandgas/522385/offshore-helicopter-services-job-cuts/) due to a “tough economic climate, as well as the fallout from Government decisions around the windfall tax, and lower than normal client activity levels.”
The company, which bases its operations in Dyce, said customer activity had fallen by 15 to 20% year-on-year.
OHS did not disclose the number of jobs cut.
However, there was better news for the company later that month after OHS announced a five-year contract extension with Serica Energy (https://www.energyvoice.com/oilandgas/525247/offshore-helicopter-services-lands-five-year-deal-amid-turbulent-market-conditions/).