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HMRC internal manual

Tonnage Tax Manual

Qualifying companies and ships: Temporary change of use

Meaning of ‘temporary’

If a qualifying ship is used for a very short period for a non-qualifying purpose and the change of use is only temporary then the period of non-qualifying use may be disregarded - so that the ship is treated as remaining a qualifying ship throughout. Any profits arising from such a period would continue to be included in the ‘relevant shipping profits’ (see TTM06010) in the normal way.

The basic rule in FA00/SCH22/PARA22 is that one or more periods of non-qualifying use in a 12-month accounting period are to be disregarded, if the aggregate period of non-qualifying use is no more than 30 days in that accounting period.

But, If the accounting period is less than 12 months (paragraph 22(3)), or if the ship is operated for only part of the accounting period (paragraph 22(4)), then the 30-day period must be reduced proportionately.

Scope of FA00/SCH22/PARA22

The provisions of PARA22 apply specifically when a ship would otherwise be non-qualifying because it was temporarily being used as one of the excluded types listed in PARA20.

The same approach applies when a ship would otherwise be non-qualifying because it was (temporarily) not being used for one of the activities listed in PARA19 (1)(a) – (d).

See examples of this in TTM03720.


FA00/SCH22/PARA22 (effect of change of use) TTM17121
FA05/SCH7/PARA7 (effect of change of use) TTM20007