UK Chamber welcomes HMRC’s revised stance on tonnage tax for shipping

 
3 October 2011

MINISTER COMMITTED TO TONNAGE TAX STABILITY AND CERTAINTY FOR UK SHIPPING

The UK Chamber of Shipping today warmly welcomed assurances it has received from Justine Greening, Economic Secretary to the UK Treasury, that the “Government is committed to ensuring stability and certainty in the UK tonnage tax regime”.  

In a letter received by the Chamber, Ms Greening has reassured the UK shipping sector “of the Government’s commitment to providing a stable and predictable tax regime, and to ensuring that we work with the shipping industry to ensure that the UK remains an attractive location for maritime investment."

This letter was closely followed by news that HMRC will today restore its original interpretation of the UK rules on eligibility for the tonnage tax regime, based on concerns raised by the Chamber on behalf of its members in shipping and maritime services.

UK tonnage tax is widely credited as the major factor underpinning the remarkable revival in the UK fleet since 2000, meeting a need for a stable UK tax regime both to support British business and to encourage international businesses to establish themselves in and operate from the UK. However, a number of shipping and maritime business organisations found during the last two years that the tonnage tax status of some companies was being challenged following changes to the Government’s formal guidance (the Tonnage Tax Manual) in 2009.  The resulting uncertainty had caused some international shipping groups to consider leaving the UK.

Following Chamber representations and a recent review within HMRC, new ‘interim guidance’ will be published today which will reverse those changes.  In this, HMRC has refocused the eligibility tests on those which were applied when the regime was originally developed and approved, and has therefore gone a long way to restoring certainty for UK-based tonnage tax companies.

HMRC has also informed the Chamber of its intention to carry out a more formal consultation exercise in order to reach consensus on a permanent interpretation of the eligibility test.

Mark Brownrigg, Director General of the UK Chamber of Shipping, said:

“At a recent meeting with the Chamber and in her following letter, the Minister reiterated the Government’s strong support for the UK’s tonnage tax regime and her commitment to providing fiscal certainty for the industry.

“It is excellent news that HMRC has restored its original interpretation of the rules on eligibility for the tonnage tax regime, which has proved such a success over the last decade.  We at the Chamber very much welcome the decisive and constructive action taken by the Minister and her team to ensure that the regime will be applied in accordance with its original purpose.

“It is crucial that – at a time of economic difficulty in world shipping, as in other sectors – the Government should ensure that the fiscal and operating environment for shipping and maritime business generally in the UK is both positive and stable.”

ENDS

For further information please contact Gemma Wilkie, PR Manager at the Chamber of Shipping on 020 7417 2834 or gemma.wilkie@british-shipping.org.

Notes to Editors

 

• The Chamber of Shipping is the trade association for the UK shipping industry, working to promote and protect the interests of its members both nationally and internationally. With 137 members and associate members, the Chamber represents over 917 ships of about 27 million gross tonnes and is recognised as the voice of the UK shipping industry.
• UK shipping has a turnover of over £11bn.  With indirect effects, UK shipping’s contribution to UK GDP is £13bn.
• A recent study by Oxford Economics for Maritime UK has stated that: “the recent dynamic growth enjoyed by the shipping industry confirms that it has continued to thrive since the introduction of the tonnage tax, with the competitive boost offered by the reform helping to attract foreign direct investment. The implementation of the tonnage tax has delivered significant benefits to the UK economy. Our estimates show that the shipping industry’s contribution to UK GDP is around 2-3 times as large as it would otherwise have been, and this additional activity supports around 70,000 extra jobs in the UK.”
• The Chamber is a member of Maritime UK, which brings together the major associations representing the UK’s the shipping, ports and maritime business services sectors.
• The Chamber is a lead partner in Sea Vision, the nationwide campaign working to raise awareness of the sea and the maritime sector, particularly amongst young people aged between 13 and 22 years old.
• For more information on British Shipping, please go to: http://www.british-shipping.org