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HMRC internal manual

Tonnage Tax Manual

Qualifying companies and ships: When does a ship cease to be qualifying?

Ship ceases to qualify

A ship will cease to be qualifying when it:

  • is lost at sea
  • is considered a constructive total loss
  • ceases to be certified for navigation at sea; i.e. no longer seagoing
  • begins to be used for the provision or goods or services normally provided on land (TTM03610)
  • becomes an excluded type of vessel (TTM03620)

Ship does not cease to qualify

A qualifying ship remains qualifying through most stages of its working life. Thus, it continues to be used for a qualifying purpose when:

  • in ballast
  • laid up awaiting a charter
  • in dry-dock undergoing a refit
  • being repaired                                                                                                                                                                                     

A ship that is laid up for a long period because of industry conditions or world markets will remain a qualifying ship provided:

  • it remains certified for navigation at sea,
  • the training commitment is maintained, and
  • it does not otherwise become a non-qualifying ship.
  • tonnage tax will continue to be due.

See also TTM03700 on change of use and TTM03710 on temporary change of use.


FA00/SCH22/PARA18 (meaning of operating a ship) TTM17096
FA00/SCH22/PARA19 (qualifying ships) TTM17101