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HMRC internal manual

Tonnage Tax Manual

Tonnage tax elections: When election takes effect?

Deferring an election in a further window of opportunity to the next accounting period

Where an election is made in a further window of opportunity (see TTM02180), the company or group may request HMRC’s agreement that it come into effect from the beginning of the accounting period following that in which it was made.

In such cases the election should include details of the commercial reasons why one of the later start dates is required. For instance, a group might be carrying out a reorganisation to prepare for tonnage tax, and therefore would not wish the election to take effect until after this reorganisation was complete.

Elections, excluding renewal elections, should be sent to the Tonnage Tax Technical Adviser.  HMRC will not agree to defer entry in cases where it is clear that the deferral is motivated by tax considerations (for instance benefiting from capital allowances on newly acquired ships before entry).  However in most cases it is likely to be clear that time is required to reorganise the business and/or put any necessary record keeping arrangements in place, and agreement will normally follow.

The company may appeal against a refusal to defer entry, see TTM02270


FA00/SCH22/PARA12(4) (when election takes effect) TTM17056
Appeals against HMRC’s refusal to vary date of entry TTM02270