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HMRC internal manual

Tonnage Tax Manual

The ring fence: Reliefs and deductions

Deductions from the tax liability

The tax liability attributable to a company’s tonnage tax profits is payable in full without any relief or set-off.

The only exceptions to this rule are that:

  • marginal small profits relief remains available
  • income tax borne by deduction may still be set-off

The prohibition applies to exclude all other reliefs and set-offs, including (but not limited to);

  • double taxation relief, and
  • unrelieved surplus ACT

This exclusion also applies to the tax attributable to any tonnage tax profits of a CFC that are included in amounts apportioned to a company under step 3 in TIOPA10/S371 BC (1). See TTM07230

See TTM07240 regarding ACT and shadow ACT.


FA00/SCH22/PARA57 (exclusion of set-off against tax liability) TTM17326
Reliefs and deductions against profits TTM07200