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HMRC internal manual

Tonnage Tax Manual

Offshore activities: Offshore profits



The term ‘offshore profits’ is used in FA00/SCH22/PARA107 (1) to refer to the profits made whilst a ship is engaged in offshore activities.

For example consider a company operating a seismic survey ship:

  • if it is shooting (collecting) seismic data in an area designated by the UK, the profits arising will be ‘offshore profits’, but
  • if it is shooting seismic data in an area designated by Norway , the profits arising will not be ‘offshore profits’.


  • See also Example 3 in TTM11220.

Special computational rules

  • Special computational rules are set out in TTM11210.

Restriction on deduction of training expenses

No deduction may be made by a company in computing its profits from offshore activities in respect of expenditure incurred in meeting the training requirement, FA00/SCH22/PARA114 (5).

However, a special allowance in respect of costs, that would not have had to be provided if offshore activities were not tonnage tax activities, may be deducted from the Corporation Tax payable, see TTM11400 onwards.


FA00/SCH22/PARA107 (profits computed on ordinary rules) TTM17611
FA00/SCH22/PARA108 (application of ring fence provisions) TTM17616
Meaning of ‘offshore activities’ TTM11010