UK Tonnage Tax Flagging Rules

Media Release
13 February 2008

The announcement overnight by HM Revenue & Customs that special flagging restrictions introduced by the EU in 2005 will apply for the first time to UK Tonnage Tax companies in the coming tax year is yet another negative development.  

With the European Commission already demanding that high-tech specialist vessels such as cable-ships and survey ships be excluded from tonnage tax and that the coverage of passenger and freight operators be more restricted in scope, the integrity and stability of the UK regime seems under attack from all quarters.

Mark Brownrigg, Director-General of the Chamber of Shipping, said: “Only last week the Chamber President warned Government that the changes already announced were shaking the faith of British and international companies alike in the stability of the UK as a place for undertaking shipping business.  Now this latest announcement compounds that damage.  Ironically, the flagging requirement may well do most damage to those companies which have chosen the British Register for their core owned fleet.  The published HMRC guidance looks distinctly unhelpful in its approach.  While the Department for Transport may understand the position, there seems to be a marked lack of political focus in both Whitehall and Brussels on the real objectives for a competitive shipping industry.”

For further information please contact:
Jeremy Harrison, Chamber of Shipping
020 7417 2834