[By: UK Ship Register]
Last Wednesday (October 27), the Chancellor announced a series of measures to stimulate the growth of the maritime industry, with significant changes to the British tonnage tax.
The plans are the first shake-up of tonnage tax rules in more than two decades, and mean that from April 2022 UK registered ships and those helping the UK reach net zero will be both more likely to be accepted if they apply. to the UK tonnage tax scheme.
The UK flag has a reputation for maintaining the highest international standards and we want more ships to benefit by registering in the UK. The reforms therefore remove any requirement for vessels under the UK tonnage tax scheme to fly the flag of any European country, instead encouraging the use of the UK flag to determine which companies can participate in the UK tonnage tax scheme. Specifically, UK flag registration will now be an important factor in HMRC’s strategic and business management test for scheme enrollment.
At the heart of the UK’s ambition to go net zero by 2050, and recognizing its global leadership in science and technology, is the expansion of the scheme to accommodate new conceptions of ships and new models arriving on the market. This includes ships that lay cables to help create wind farms and scientific research vessels. Companies that bring value to the UK by investing in decarbonisation will also be more likely to be accepted if they apply to the UK scheme.
The plans also make it easier to join the tonnage tax scheme. The HMRC will now have more leeway to admit into the regime companies that may have missed the initial window of opportunity to join or readmit companies that have left for purposes other than tax evasion. The blocking period has also been reduced from 10 to 8 years.
Cruise passengers should also benefit, with an increase in the abatement for onboard income (incidental income) from 10% to 15%. They should therefore no longer have to check their finances after every trip they take, reducing their administrative burden.
Brian Johnson, Managing Director of the Maritime and Coastguard Agency, welcomes the changes, saying âThese reforms are a welcome step forward to spur growth in a sector in which the UK has real strengths.
The British Flag is committed to becoming the best performing international flag and is already a trusted partner for many premium shipping companies. These financial reforms now add to the list of many benefits the flag can offer to others who are considering locating their maritime business in the UK. “
There is also a boost for British sailors as the government seeks to provide more opportunities for British cadets as part of the upgrades. HMG and industry will continue to work collaboratively on the commitment to improve training opportunities, and the Department of Transport and the Maritime and Coast Guard Agency will now explore how best to use existing powers to ensure that the training experience works for our cadets and shipping companies across the industry.
This comprehensive package of reforms aims to see more companies establishing their headquarters in the UK, using the UK’s world-leading maritime talent and services sector and flying the UK flag. They will make it easier for shipping companies to locate in the UK, ensure they are not at a disadvantage compared to companies operating in other countries and reduce unnecessary administrative burdens.
The products and services described in this press release are not endorsed by The Maritime Executive.