TTM11400 - Offshore ctivities: Allowance for training costs
Training requirement continues during ‘offshore’ periods
The fact that a ship may be engaged in offshore activities does not mean that it ceases to be a qualifying ship for tonnage tax purposes, and the training requirement in respect of that vessel remains in place, FA00/SCH22/PARA114 (1).
Training allowance for ‘offshore’ periods
None of the fiscal benefits of tonnage tax are in place whilst the ship is carrying out its offshore activities.
To compensate for the imposition of the training requirement, an allowance under FA00/SCH22/PARA114 (2) is available to be set against the company’s Corporation Tax liability on that offshore activity, but not against Corporation Tax charged on tonnage tax profits or other profits.
The allowance is equivalent to the cost of implementing the training requirement during the period of offshore activity. See TTM11410 for the details and TTM11420 for an example.
Excess allowance carried forward
Where there is an insufficiency of tax against which to set the allowance the excess allowance may be carried forward and set against tax on offshore profits in a subsequent accounting period, FA00/SCH22/PARA114 (4).
No deduction from offshore profits
In computing its profits from ‘offshore activities’ no deduction may be made for the cost of meeting the training requirement, even if this were more than the statutory PILOT limit, FA00/SCH22/PARA114 (5).
References
| FA00/SCH22/PARA114 (training requirement for offshore activities) | TTM17646 |
| Procedure for computing training costs allowance | TTM11410 |
| Example calculation of training costs allowance | TTM11420 |