TTM01020 | Introduction to tonnage tax: Background

The legislation

Primary legislation

The primary legislation is found in section 82 and Schedule 22 Finance Act 2000. Royal Assent was granted on 27 July 2000, although elections into tonnage tax can be effective from 1 January 2000.

Schedule 22 FA2000 was amended by Schedule 32 Finance Act 2003.

Schedule 7 FA2005 introduced further changes.

Section 25 FA2022 and section 10 and Schedule 8 FA2024 made further amendments.

Secondary legislation

The secondary legislation comprises six Statutory Instruments

The Tonnage Tax Regulations 2000

Made by the Board of Inland Revenue on 25 August 2000 and coming into force on 31 August 2000, they cover:

• qualifying secondary activities (regulation 3);

• the written down value of assets on the exit of the company from the Tonnage Tax regime (regulations 4, 5 & 6);

• capital allowance rules for companies within the offshore regime (regulation 7), and

• the rules relating to corporate partnerships (regulations 8 to 13).

The Tonnage Tax (Training Requirement) Regulations 2000

Made by the Secretary of State the former DETR on 3 August 2000 and coming into force on 31 August 2000, they set out:

• the minimum training obligation;

• the submission of an annual training commitment to DfT;

• the provision to allow payment in lieu of training (PILOT);

• the submission of returns and any payment due every four months, and

• a higher rate of payment in case of failure to meet the training commitment.

Other statutory instruments

SI2005/1449 and SI2023/508 provide a further opportunity to elect into the scheme following amendments in FA05 and FA22. Excepted years (TTM03905) are provided for by SI2005/1480, SI2006/333, SI2007/850, SI2018/421 and SI2019/658.

References