TTM11130 - Offshore Activities: Types of vessel
Vessels outside tonnage tax
Certain types of vessels that are engaged in offshore activities either in the UKCS or elsewhere in the world are explicitly excluded from being qualifying ships (TTM03600). Neither the normal tonnage tax rules nor the special rules will apply to such vessels, and they will come within the normal Corporation Tax regime whether or not they are engaged in offshore activities.
Those vessels excluded from being qualifying ships are listed in FA00/SCH22/PARA20. Of these the types likely to be engaged in offshore activities are:
Offshore installation
The definition of ‘offshore installation’ is in CTA10/S1132 (see TTM03645). That definition only relates to installations in ‘controlled waters’ i.e. UKCS, but this geographical limitation is disapplied for tonnage tax purposes.
This definition will include:
- mobile offshore drilling rigs
- floating, production, storage and offloading vessels (FPSOs)
- Flotels (floating hotels, also known as accommodation platforms).
This list is not exhaustive.
Tanker dedicated to a particular oil field
The legislation imports the provisions of the Oil Taxation Act 1983 to determine whether a tanker is a tanker ‘dedicated to a particular field’. But ordinary oil and gas tankers will normally be qualifying ships.
Doubtful cases
Whether or not a particular vessel is excluded from tonnage tax is a question of fact, and the answer will be self evident in most cases. Submit any difficult or doubtful cases to the Tonnage Tax Technical Adviser for advice.
References
| FA00/SCH22/PARA20 (excluded vessels) | TTM17106 |
| Different types of vessel and their treatment | TTM11100 |
| Contact points | TTM01120 |