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HMRC internal manual

Tonnage Tax Manual

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HM Revenue & Customs
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Tax avoidance: Action by tax specialist

Exclusion of singleton company

If HMRC decides to exercise the power to exclude a singleton company (which is not a member of a group), an officer gives notice in writing to the company, specifying the date from which it is excluded from tonnage tax.

The specified date will be the first day of the accounting period in which the transaction or arrangement was entered into.

The effect of the notice will be that the company’s tonnage tax election ceases to be in force from that date

There may be an exit charge on the company (see TTM05550).

Exclusion of a group

If HMRC decides to exercise the power to exclude a group, an officer gives notice in writing to the representative company (see TTM12210), specifying the date from which all the qualifying companies in the group are excluded from tonnage tax.

The specified date must not be earlier than the beginning of the earliest accounting period in which any member of the group entered into the transaction or arrangement in question.

Where there is no representative company the notice is sent to the company that has been party to the transaction or arrangement in question. Where there is more than one such company it may be addressed to any one of them.

The effect of the notice is that the tonnage tax election ceases to be in force from that date. If that date is not already the beginning of an accounting period for any of the previously qualifying members of the tonnage tax group, a new accounting period will commence at that time for each affected company (see TTM07010)

There may be an exit charge on each company in the group (see TTM05550).

References

FA00/SCH22/PARA42 (exclusion from tonnage tax) TTM17251
   
Appeals against exclusion TTM05540
Exit charge where excluded for tax avoidance TTM05550
Effect of exiting Tonnage Tax TTM14100