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HMRC internal manual

Tonnage Tax Manual

HM Revenue & Customs
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Tonnage tax elections: Example 2

Group companies with common accounting periods

There are three companies in a group: A Ltd, B Ltd and C Ltd.  They decide they want to elect into tonnage tax on 1 July 2006, i.e. in a further window of opportunity.  They have a common accounting date of 30 June each year.

The group writes to HMRC notifying that A Ltd and B Ltd wish to come into tonnage tax with effect from 1 January 2005, whilst C Ltd wishes to delay entry to the regime until 1 July 2007.

All three companies have the same accounting date, so they must all come into tonnage tax from the same date, which must be the beginning of an accounting period, not 1 January.  The group must therefore decide whether:

  • to accept that under the normal rule the election would first have effect from the beginning of the accounting period during which the election is made, i.e. 1 July 2006;

  • to backdate its election to the AP commencing 1 July 2005, with HMRC’s agreement; it cannot backdate to 1 July2004, as this was before  1 January 2005);

  • it wants to seek HMRC’s agreement to entry with effect from 1 July 2007; or

  • there are sufficient exceptional circumstances to justify the group’s asking for HMRC’s agreement to delay entry to 1 July 2008.

In the absence of any request from the group the default date will be 1 July 2006.


General rule on election taking effect TTM02200
Backdating election to earlier AP TTM02210
Deferring election to next AP TTM02220
Deferring election to next but one AP TTM02230