Find out how to pay tonnage tax if you're a shipping company
Understand how you can pay tonnage tax if you manage your ships from the UK and they weigh 100 tons or more.
Overview
Tonnage tax is a form of Corporation Tax for working out the tax you owe on your profits.
You can choose to pay tonnage tax on a fixed notional profit, instead of your actual profits from your shipping activities. This is based on the net tonnage of your ships.
Qualifying conditions
You may be able to choose to pay tonnage tax if:
- you’re a qualifying company
- you have qualifying ships
- you meet certain obligations to train seafarers
Elect to use tonnage tax
You can elect to use tonnage tax but you must sign up for a minimum of 10 years.
You can make a renewal election on a rolling basis to extend the original election. You’ll not be able to renew your election if you do not renew it within the 10 year period.
Ships not registered in the UK, Gibraltar, European Union (EU) or European Economic Area (EEA)
If you start to operate a qualifying ship after electing into tonnage tax, you must carry out a flagging test to decide if your ship qualifies.
You do not need to carry out the flagging test if the financial year is excepted.
You must always register tugs and dredgers in the UK, Gibraltar, EU or EEA member states to qualify for tonnage tax.
Excepted years
As long as all other conditions are met, your ship will qualify for tonnage tax if the financial year it’s operated in is an ‘excepted year’. The financial year is from 1 April to 31 March.
HMRC will test the tonnage of ships registered with the UK, Gibraltar, EU or EEA member states for tonnage tax as a proportion of tonnage tax ships registered worldwide.
If this proportion has not fallen from the year before, HM Treasury may designate that financial year as an ‘excepted year’.
The following are excepted years:
- 2005
- 2006
- 2007
- 2018
- 2019
Get help or more information
Read the Tonnage Tax Manual for more information.
You can contact the HMRC tonnage tax technical adviser by:
- email: tonnagetax@hmrc.gov.uk
- phone: 03000 585 490
- post:
Large Business
S1755
Newcastle
NE98 1ZZ
Updates to this page
Last updated 19 July 2023 + show all updates
-
The email contact address for help or more information has been updated.
-
The postal address for the HMRC tonnage tax technical adviser has been updated.
-
This guidance has been updated to include information about the registration of vessels in the UK and Gibraltar.
-
Contact details for the HMRC tonnage tax technical adviser have been updated.
-
The year 2019 has been added to the list of excepted years.
-
The 'Overview', 'Elect to use tonnage tax' and 'Excepted years' sections have been updated following legislative changes.
-
Under heading Excepted years, the no years excepted period is now 1 April 2008 to 31 March 2018.
-
First published.