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HMRC internal manual

Tonnage Tax Manual

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HM Revenue & Customs
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Relevant shipping profits: Wholly qualifying secondary activities

The activities, which are regarded as wholly qualifying secondary activities, as specified in SI00/2303/REG3, and with additional notes in brackets, are:

(a) The carriage of passengers or cargo otherwise than on board a qualifying ship operated by the company, where:

 

 

  • there is a single contract with the customer for a journey which includes a voyage on the qualifying ship, and
  • the transport for the remainder of the journey is purchased or obtained by the company by provision (arm’s length provision) which would have been made as between independent enterprises

 

 

(This will include:

* Train, coach, bus or other transport services (including flights) to take passengers to or from the ship or eligible linked holiday; including purchase of single seats or block of seats on scheduled services, and chartered-in transport to and from cruise, provided that only passengers who will be travelling on the ship are carried;
* the non-cruise part of an inclusively-priced holiday where the non-cruise part is bought in by the tonnage tax company on arm’s length terms at a price no more than half of the total price paid for the holiday by the customer.
* a single night's accommodation for passengers in transit immediately prior to embarkation or immediately after disembarkation)

(b) Administrative and insurance services which are directly related to the carriage of passengers or cargo, including under a contract described in (a)
 

(This will include customs, document handling, VAT, and insurance in respect of the voyage in question.)

(c) The embarkation and disembarkation of passengers on a qualifying ship operated by the company, and the provision of relevant facilities by the company
 

(This will include:

* Car parking, provided that receipts from non-passengers do not on average exceed 10% of receipts from passengers
* The provision of quayside shopping facilities for passengers, provided that the range of goods available is no wider than would qualify to be sold on board under the regulations.)

(d) the provision of excursions for passengers of a qualifying ship operated by the company. This includes:
 

  • Excursions on non qualifying vessels
  • The provision of a shore based facility for the exclusive use of own passengers
  • Trips of longer than a single day provided the cabin on board ship remains available for the passenger’s exclusive use.

(e) the provision of holidays, sold to the customer under a single contract, where:
 

  • part of the holiday is a voyage on a qualifying ship operated by the company, and the remaining part is land-based (the land-based part),
  • the land-based part is purchased or obtained by the company by arm’s length provision, and
  • the cost to the company of the land-based part is less than one half of the price paid by the customer under the single contract;

(f) sales and facilities which are normally provided to customers by seagoing passenger ships, including:
 

  • the provision of food or drink,
  • entertainment, but not betting or gambling (see TTM06150),
  • the sale of alcoholic beverages, perfume and tobacco, but not luxury goods (see TTM06160), and
  • the exchange of amounts of different currencies for personal expenditure;

(g) the loading and unloading of cargo carried on a qualifying ship operated by the company, and the provision by the company of facilities used exclusively for those purposes;

(h) the consolidation or breaking of cargo carried on a qualifying ship operated by the company, immediately before or after the voyage, where the activity is not haulage- related;

(i) the temporary placement of cargo carried on a qualifying ship operated by the company, on or at the dockside, where the activity is not part of a long-term storage operation;

(j) the rental or provision to customers of containers for goods to be carried on a qualifying ship operated by the company; and

(k) activities carried on by the company in relation to a qualifying ship operated by another qualifying company in the same tonnage tax group, which would be core qualifying activities of the first-mentioned company if carried on in relation to a qualifying ship operated by that company.

Slot charters and pooled liner services

Slot charters between shipping companies, and pooled liner services will be accepted as qualifying secondary activities under the principles set out in TTM15210

References

SI00/2303/REG3(3) (wholly qualifying secondary activities) TTM18003
   
Slot charters and pooled liner services TTM15210