Offshore activities following Finance Act 2005
Different types of vessels and their treatment
Vessels that are engaged in offshore activities are treated in two different ways by the legislation.
Vessels that are excluded from the tonnage tax regime wherever they operate are considered in TTM11130. All other qualifying vessels engaged in offshore activities are within tonnage tax to the extent that they are performing one or more of the excluded activities. When qualifying vessels are engaged elsewhere they come within the normal tonnage tax regime. See TTM11110.
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|
|De minimis activity ignored||TTM11140|
|Treatment of periods of inactivity||TTM11150|