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HMRC internal manual

Tonnage Tax Manual

HM Revenue & Customs
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Relevant shipping profits: Outline

Tonnage tax profits replace relevant shipping profits

Tonnage tax profits replace relevant shipping profits in a company’s calculation of profits chargeable to tax.  The provisions are set out in FA00/SCH22/PART6 (PARA44 to PARA51) with further details on qualifying secondary activities in regulation 3.

Tonnage tax profits also replace losses

But tonnage tax profits also replace any losses incurred by a company on activities that, if profitable, would have produced relevant shipping profits.

Thus a company can be subject to corporation tax on tonnage tax profits even in a year when it suffers overall losses.

Only applies to tonnage tax companies

The concept of relevant shipping profits only has application for a company with tonnage tax profits, which it substitutes for its relevant shipping profits. This means that if a company does not operate any ships, it has no relevant shipping profits, even if it carries out ship-related activities on behalf of other members of the group. In such a case all of its income is outside the ring-fence.


FA00/SCH22/PARA3 (profits of tonnage tax company) TTM17011
FA00/SCH22/PARA42 onwards (relevant shipping profits) TTM17251
SI00/2303/REG3 (qualifying secondary activities) TTM18003