North Sea oil and gas activity is back in the news. There has been no formal change in licensing policy yet, but North Sea drilling discussions have picked up in recent weeks, and industry voices are pushing for renewed UK oil and gas activity through existing licensed fields and projects such as Rosebank and Jackdaw.
What matters for your business is simpler: when North Sea activity increases, demand for specialist contractors always follows. And that means your IR35 governance is about to be tested.
A Busier Energy Sector Means a Bigger Contractor Population
The UK energy sector has always leaned on flexible, specialist talent. When a project moves from planning into mobilisation, organisations bring in contractors across a wide range of roles, including:
- Project engineers
- Offshore construction specialists
- Commissioning teams
- Inspection personnel
- QA/QC professionals
- Non-destructive testing (NDT) specialists
- Health, safety and environment (HSE) advisors
- Project managers
- Drilling specialists
- Marine personnel
Alongside these workers comes a more complex supply chain, too. Engineering consultancies, recruitment agencies, offshore service providers and specialist subcontractors all get pulled in. For many organisations, this means a fast-growing contractor population in a fairly short window of time.
More Contractors Means More Governance Pressure
A bigger contractor population does not automatically create an IR35 problem. But it does put real pressure on the governance processes meant to manage it.
As contractor numbers grow, organisations typically see:
- Faster mobilisation of workers
- A jump in recruitment activity
- Contractors moving between projects
- Greater use of personal service companies (PSCs)
- International contractor engagement
- More complex labour supply chains
- Multiple hiring managers making engagement decisions on their own
Each of these adds strain to your governance process. Without consistent oversight, it becomes easy to end up exposed to compliance risks that only get harder to manage as a project scales.
IR35 Governance Is More Than a One-Time Status Check
Many organisations built solid IR35 programmes after the off-payroll working reforms. Policies went in. Status Determination Statement (SDS) processes were established. Governance frameworks were put in place.
The question worth asking now is whether those frameworks have ever been tested against a real jump in contractor numbers. Good IR35 governance is not just about getting individual status decisions right. It also means being able to show, consistently, that you are exercising:
- Reasonable care in every determination
- Consistent SDS production across the business
- Hiring manager training and capability
- Contract and working practice alignment
- Fee payer governance
- Supply chain assurance
- Clear, documented decision-making with a solid audit trail
These are the exact areas HMRC expects an organisation to be able to evidence if compliance is ever challenged.
Speed Is Where Governance Usually Breaks
The biggest risk in a major project mobilisation is speed. When a project needs people fast, organisations naturally focus on getting skilled workers in the door. That is understandable, but rapid hiring can strain governance processes that were not built to scale quickly.
Watch for:
- Inconsistent status assessments across teams
- Hiring managers skipping agreed processes under time pressure
- Limited visibility across multiple suppliers
- Incomplete documentation
- Thin audit trails
- Reduced oversight of supply chain compliance
These issues are not always obvious during mobilisation itself. They tend to surface later, when governance gets scrutinised.
A Few Questions Worth Asking Now
If your organisation expects to bring on more contractors as North Sea activity increases, a short self-check now can save a lot of difficulty later:
- Can your current governance framework support a larger contractor population?
- Are your hiring managers confident in what is expected of them?
- Are your SDS processes consistent and well documented across every engagement?
- Do you have a clear audit trail for every contractor you bring on?
- Could you confidently demonstrate reasonable care if HMRC asked for evidence tomorrow?
If any of these gave you pause, now is a good time to take a closer look, before contractor numbers climb further.
Brookson Legal Can Help
Brookson Legal has supported organisations with IR35 and contingent workforce compliance since the legislation was first introduced in 2000. As the UK’s leading IR35 law firm, our specialist legal team helps businesses strengthen governance by reviewing existing frameworks, assessing compliance processes, and providing practical legal advice that supports both project delivery and regulatory confidence.
Whether you are preparing for a busier North Sea, or simply want to pressure-test your existing IR35 controls, our team can help make sure your governance framework is ready.