TaxPersonal TaxTonnage levy set for launch

Tonnage levy set for launch

Speculation among tax experts intensified this week over government plans to introduce a tonnage tax for the British merchant shipping fleet to encourage more vessels to be registered in the UK

Plans for the tax change, which would replace corporation tax with a tonnage tax based on the size of the fleet, are expected by tax experts in the government’s shipping policy paper next month. It would result in a lower level of tax on individual shipowners, and the government hopes that would encourage more shipowners to register their vessels in the UK instead of using overseas flags. Any proposal could be introduced in the March Budget.

The size of the UK-owned fleet has shrunk by two-thirds since 1990. Several European countries, including the Netherlands, have seen the size of their fleet increase after introducing a tonnage tax.

Paul Powell, head of the maritime industries group at Moore Stephens, welcomed the possibility of such a tax. ‘With corporation tax, shipowners pay a lot of their profits away in a good year and the industry is in dire straits at the moment. The new tax would be easy to administer because ships already have their gross tonnage.’

Chas North, a transport tax partner at KPMG, said a tonnage tax was ‘possible’ rather than ‘probable’.

He added the shipping industry had always been treated favourably by government.

Related Articles

HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor