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HMRC internal manual

Tonnage Tax Manual

Tonnage tax elections: Pre-election clearance

Information to be provided to HMRC

The non-statutory business 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.

NBCG7600 gives further detail on the conditions of non-statutory business clearances.

Tonnage tax is a State aid approved by the European Commission.  Where State aid is found to have been granted unlawfully, i.e. beyond the permitted limits, the Commission may order recovery of the aid from the recipient, together with compound interest.  However, provided the UK tonnage tax legislation is observed and the related operations genuinely contribute to economic activity within the European Economic Area, this issue should not arise.  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, or

  • the European Commission has determined that State aid has been granted unlawfully.

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period for possible adjustments and will then formally notify the company that the clearance is incorrect and is being rescinded.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.


Areas covered by clearance application TTM02030
Timing of clearance application TTM02050
Foreign company or group TTM02060