Offshore activities: Different types of vessels and their treatment
You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.
Vessels that are engaged in offshore activities are treated in three different ways by the legislation:
- Vessels to which the special rules apply
The special rules only apply when they are engaged in offshore activities; when they are engaged elsewhere they come within the normal tonnage tax regime. See TTM11110.
- Vessels to which the special rules do not apply
Vessels which come within the normal tonnage tax regime wherever they operate. See TTM11120.
- Vessels outside tonnage tax
Vessels which are excluded from the tonnage tax regime wherever they operate. See TTM11130.
(NB Remember that the ‘normal’ tonnage tax regime only applies to shipping profits.)
Many vessels, which engage in offshore activities, will be qualifying ships by virtue of FA00/SCH22/PARA19 (1)(d) as ships that provide ‘transport in connection with other services of a kind necessarily provided at sea’.
Note that vessels which are not seagoing, or which are less than 100 gross tons, cannot be qualifying ships (TTM03500). All such vessels will come within the normal Corporation Tax regime wherever they operate.
|FA00/SCH22/PARA19 (qualifying ships)||TTM17101|
|FA00/SCH22/PARA20 (excluded vessels)||TTM17106|
|FA00/SCH22/PARA105 (special provisions do not apply)||TTM17601|
|De minimis activity ignored||TTM11140|
|Treatment of periods of inactivity||TTM11150|