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HMRC internal manual

Tonnage Tax Manual

Relevant shipping profits: Secondary activities qualifying up to set limits

Betting and gambling

Gambling is to be interpreted broadly and will include slot machines, casino games, raffles, bets on horseraces etc. So long as the type of betting or gambling facilities offered are of a kind normally offered for the entertainment of customers on seagoing passenger ships, their provision can be a qualifying secondary activity; but only if the betting/gambling turnover is negligible compared to the turnover from the company’s core qualifying activities.

You should accept turnover from gambling as negligible if it is less than 10% of:

  • ticket sales, plus
  • receipts from the letting of cabins, and
  • sales of food and drink for immediate consumption for that voyage.

The turnover from betting and gambling for this purpose is the receipts from gambling after deducting winnings paid out, but before any other expenses.

The test applies separately to each individual voyage. In this context, a round-the-world cruise should be viewed as a single voyage.

Where the turnover from betting and gambling on a particular voyage is more than negligible, then the whole of the profits from betting and gambling on that particular voyage will fall outside the ring-fence.

Where third party concessionaires offer gambling facilities and the ship operator’s income from the concession varies partly in relation to turnover, then the “neglible” test will also apply to the income from the concessionaire.

Is it a qualifying ship?

If the gambling facilities go beyond what could reasonably be regarded as being of a kind normally offered for the entertainment of passengers, you should consider whether the ship is in fact a qualifying ship – since it may be being used to provide services of a kind normally offered on land, such as a floating casino, (see TTM03600).


SI00/2303/REG3 (4)(b)(i) (permitted levels) TTM18003
FA00/SCH22/PARA19 (2) (services normally provided on land) TTM17101