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HMRC internal manual

Tonnage Tax Manual

Offshore activities pre 2005: Vessels to which the special rules do not apply

There are certain types of qualifying ship to which the special rules do not apply, and which will stay within the normal tonnage tax regime even when they are engaged in offshore activities.

These are listed in FA00/SCH22/PARA105:

  • Offshore supply vessels: also known as platform supply vessels (PSVs) used to transport equipment, supplies & personnel between shore bases and offshore oil installations.
  • Tugs: generally used to tow drilling rigs (and other vessels such as cargo barges) to and between the offshore locations.
  • Anchor-handling vessels: used to position drilling rigs and the laying of large anchors on the sea bed (to keep the rig in position during drilling) and their retrieval once the rig is ready to move to the next location.
  • Tankers: generally used to transport crude oil from offshore oil installations to oil refineries or terminals.

This list is exhaustive.  However, in modern shipping practice, it is common for vessels to be multifunctional.  Where a vessel can undertake one or more of the functions related to the types of vessel listed above it may also be treated as a type to which the special rules do not apply.  But sometimes the allocation to vessel type is unclear.

Multifunctional vessels

  These are constructed to undertake a variety of activities including:

  • Anchor handling
  • Towing
  • Trenching
  • ROV (remotely operated vehicle) operation
  • Cable laying
  • Pipelaying
  • Underwater construction work
  • Helicopter operations
  • Safety standby
  • Supply.

Doubtful cases

The question of whether a multifunctional vessel falls within the prescribed type is one of fact and may turn on expert opinion.  The legislation does not define the types of vessel listed at FA00/SCH22/PARA105 and it follows that they will be given their common usage meaning.  However, these are shipping industry terms and are likely to be interpreted according to how a person knowledgeable in that trade would view them.  If the company obtains advice that the vessel should be regarded as falling within the PARA105 categories, this should be accepted in the absence of evidence to the contrary of similar standing.  The Tonnage Tax Technical Adviser will seek to obtain this in cases where an officer is not satisfied.


FA00/SCH22/PARA105 (special provisions do not apply) TTM17601
Different types of vessel and their treatment TTM11100
Contact points TTM01120