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HMRC internal manual

Tonnage Tax Manual

Tonnage tax elections: Example 3

Group companies with differing accounting periods

D Ltd has three subsidiaries, E Ltd, F Ltd and G Ltd. They have varying annual accounting dates as follows:

D Ltd: 31 December

E Ltd: 31 March

F Ltd: 30 June

G Ltd: 30 September

The group makes a tonnage tax election on 1 April 2006, notifying that it wishes the election to have effect from the earliest possible date for each company.

The group election is made on 1 April 2006. The beginning of the accounting period then running for each of the companies in the group is as follows:

* D Ltd: 1 January 2006
* E Ltd: 1 April 2006
* F Ltd: 1 July 2005
* G Ltd: 1 October 2005

With HMRC’s agreement, the election can have effect for D Ltd and E Ltd from the start of the accounting period before that during which the election is made, i.e. from the following dates:

* D Ltd: 1 January 2005
* E Ltd: 1 April 2005

But there is no scope for F Ltd and G Ltd to backdate their entry to the regime to before the period dictated by the normal rule, as they do not have an earlier accounting period starting on or after 1 January 2005.

The election runs for 10 years from the time that the election first had effect for any company.  In this case, the election first has effect (for D Ltd) on 1 January 2005, so will expire on 31 December 2014.


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
Group companies with different Aps TTM02240