Revenue announces tonnage tax boost for shipping industry
The government today announced the measures that will govern the tonnage tax when it is introduced for the UK shipping industry next year.
Under the arrangements shipping companies will have the option to participate or to remain in the standard corporation tax regime, subject to all qualifying UK shipping activities within a group being taxed on the same basis.
For those opting for the tonnage tax, a company’s taxable profits will be derived by reference to the net tonnage of each of the qualifying ships it operates. It will pay corporation tax at the normal rate on the derived profit. Qualifying ships must be seagoing, of at least 100 tons gross tonnage and must be engaged in transporting goods or passengers by sea or providing marine assistance.
Paymaster General, Dawn Primarolo, said: ‘In his independent report into a UK tonnage tax, Lord Alexander put forward a design for a tonnage tax regime which would allow the UK shipping industry to exploit its internationally renowned maritime strengths, improve its training provision and compete fairly on the international stage – without putting the Exchequer at risk from escalating costs or a tax avoidance bonanza.
‘I am pleased to say that we now have available draft legislation which is very much in line with the Lord Alexander model which was warmly welcomed by the industry.’