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TTM02040 | Tonnage tax elections: Pre-election clearance

From HM Revenue & Customs · Tonnage Tax Manual

Information to be provided to HMRC

The non-statutory advance election clearance request should be made in writing and provide all relevant information to enable a decision to be made, including full details of the tonnage tax group structure. A meeting may subsequently be useful if further information is needed.

Status of the clearance

Subject to what follows, the treatment agreed by HMRC of the company or companies detailed in the election may be relied on provided

  • all relevant information is fully and accurately supplied, and

  • the proposals as described are implemented in full.

ONSCG6150 contains a draft approval letter that explains the scope of approval.

Tonnage tax was, when introduced, a 'State aid' approved by the European Commission and is now subject to 'subsidy control' administered by the Competition and Markets Authority of the UK. There is more about tonnage tax as a State aid at TTM01250.

It follows that the agreed treatment will continue until (and unless)

  • company circumstances change such that the terms of the original clearance no longer apply, or

  • there is a material legislative change in the scope or operation of the tonnage tax regime.

Enquires into a tonnage tax company's tax return may extend to whether the terms of the clearance continue to be satisfied.

Where a tonnage tax company’s business or structure materially changes it may seek confirmation from HMRC that the scope of clearance still applies.

If, exceptionally, HMRC considers that a clearance may have been given erroneously it will invite the company to discuss the circumstances and the terms of the clearance. If, in the light of this discussion, HMRC concludes that the clearance was indeed given erroneously it will agree with the company a reasonable period for possible adjustments and will then formally notify the company that the clearance is incorrect and is being rescinded. The treatment agreed in the clearance will cease from the date of the notification.