UK Tonnage tax can be used instead of Corporation Tax for working out the tax you owe on your profits.
You can choose to pay Tonnage Tax on a fixed notional profit, instead of your actual profits from your shipping activities. This is based on the net tonnage of your ships.
Qualifying conditions
You may be able to choose to pay tonnage tax if:
- you are a qualifying company (web link)
- you have qualifying ships (web link)
- you meet certain obligations to train seafarers (web link)
Reforms from 5th April 2022 remove any requirement for ships in the UK Tonnage Tax regime to fly the flag of any European country, instead encouraging the use of the UK flag when determining which companies can participate in UK Tonnage Tax. Specifically, UK Flag registration will now be an important contributing factor towards HMRC’s strategic and commercial management test for enrolment. The UK flag has a reputation for maintaining the highest international standards and we want more ships to benefit from this by registering in the UK.
Flagging to the UK is not a condition for a qualifying ship to enter UK Tonnage Tax arrangements.
More information
A full UK Tonnage Tax manual for operators is available from HM Revenue and Customs (HMRC) https://www.gov.uk/hmrc-internal-manuals/tonnage-tax-manual/ttm03830
Alternatively, you can contact the UK Shipping Concierge service, a one-stop shop for maritime businesses wishing to interact with various government departments contact@ukshippingconcierge.gov.uk