New UK Tax Could Hit Offshore Sector
Companies in the offshore maritime sector could be among those hit by a 25 percent Diverted Profits Tax (DPT) charge under draft UK legislation scheduled to enter force in April 2015, international accountant and shipping adviser Moore Stephens said. Under the draft legislation published by the UK government in December 2014, the new DPT could potentially apply to many UK companies transacting with overseas connected parties. Moore Stephens tax partner Sue Bill says, “The legislation…
Moore Stephens to Make Representation on Tonnage Tax Changes
International accountant and shipping consultant Moore Stephens is to make representation to Her Majesty’s Revenue & Customs in connection with recently issued draft revised guidance in respect of the U.K. tonnage tax regime, some of which it considers to be unhelpful. Moore Stephens tax partner Sue Bill said, “None of the changes are fundamental. Indeed, some of them are helpful, for example the revised comments regarding the circumstances in which a tonnage tax company is regarded…
Moore Stephens Welcomes UK Tonnage Tax Training Initiative
International accountant and shipping adviser Moore Stephens has welcomed an initiative by the UK Department for Transport (DfT) which it says will encourage the training of ratings. The DfT is to pilot a change to the tonnage tax training commitment which will allow three ratings to be trained in place of one officer-cadet. It will gather evidence regarding this proposed change with a view to making it permanent. The intention is that the pilot scheme will start in October 2015, but this is subject to the DfT receiving regulatory clearance in time.
UK Budget 2014 Good News for Shipping: Analysts
The UK government’s Budget 2014, issued on 19 March 2014, is good news for UK shipping as it ensures the continuation of a stable UK tax regime for shipping, as has been the case for the past few years, according to international accountant and shipping adviser Moore Stephens. Moore Stephens tax partner Sue Bill says, “Overall, Budget 2014 is fairly neutral for shipping. The main surprise is the restriction of the proposed rules on capping the amount of tax relief for intra-group leasing payments for large offshore oil and gas assets under bareboat charters to certain assets only…
Moore Stephens Urges Changes to UK Tonnage Tax
International accountant and shipping adviser Moore Stephens has made representations to Her Majesty’s Revenue & Customs (HMRC) about changing the way in which the written-down values of vessels are calculated under the U.K. tonnage tax rules, which it considers are not realistic in terms of their interaction with the capital allowances regime. Moore Stephens tax partner Sue Bill said, “Where a company exits tonnage tax other than on the expiry of an election, and still owns ships, unless a ship falls within the definition of a ‘long-life asset’, its cost for capital allowances purposes is written down broadly as if the company had claimed capital allowances at 25 percent on a reducing balance basis for each year that it owned the ship.
EU State Aid Guidelines Welcomed by Shipowners, Not by Union
The shipping industry has welcomed a decision by the European Commission to keep in place unchanged guidelines relating to state aid to maritime transport, which include tonnage tax regimes, but seafarers' union Nautilus sees it differently, according to the UK maritime industry's latest 'Maritime London Newsletter'. Commission vice-president Joaquín Almunia, responsible for competition policy, recently decided to continue the 2004 Guidelines on State Aid to Maritime Transport without revision. The UK maritime unions, however, have complained that an opportunity was missed to increase the number of EU seafarers on EU-flag ships. Sue Bill…
Moore Stephens Welcomes EC's State Aid Decision
International accountant and shipping adviser Moore Stephens has welcomed a decision by the European Commission to keep in place in their current form the guidelines relating to state aid to maritime transport, which include EU tonnage tax regimes. The decision follows an EC review of the guidelines and has been formally communicated to the European Community Shipowners’ Associations (ECSA). Sue Bill, a tax partner with Moore Stephens, says, “This is extremely good news for the shipping industry, both in the U.K.
Security Deposit Interest Ring-fenced Under Tonnage Tax
International accountant and shipping adviser Moore Stephens has welcomed a decision by the U.K. First Tax Tribunal that interest received on security deposits relating to loans taken out to buy ships within tonnage tax is not taxable. HMRC had argued that the interest income was outside tonnage tax as it related to the purchase of ships by London-based bulk and chemical tanker operator Euroceanica (U.K.) Limited, which was not a trading activity for the purposes of the tonnage tax legislation. It had further maintained that the giving of a security deposit was not a ‘necessary and integral’ part of the activity of operating ships as it was not a mandatory or “necessary” part of ship financing.
Some UK Budget Good News for Shipping Industry
International accountant & shipping adviser Moore Stephens says the UK Budget 2013 contains generally good news for the shipping sector. Measures which will have an impact on the shipping industry include a reduction in the main rate of UK corporation tax from 23% for the year ended 31 March 2014 to 21% from April 2014. A further reduction to 20% from April 2015 has now been announced. There was also good news for shipping on the capital gains front. Last year the government announced that, where a company had a functional currency other than sterling, capital gains and losses on disposals of shares would, with effect from April 2013, be calculated in that functional currency rather than in sterling.
UK Budget is Good News for Shipping Sector
International accountant and shipping adviser Moore Stephens says the UK Budget 2013 contains generally good news for the shipping sector. Measures which will have an impact on the shipping industry include a reduction in the main rate of UK corporation tax. This is 23 per cent for the year ended 31 March 2014, reducing to 21 per cent from April 2014. A further reduction to 20 per cent from April 2015 has now been announced. There was also good news for shipping on the capital gains front.
Moore Stephens Rues Missed Opportunity
International accountant and shipping consultant Moore Stephens says it is regrettable that changes announced for inclusion in the UK Finance Bill 2013 have failed to remove exchange rate distortions from the calculation of capital gains on ships. Currently, all capital gains and losses subject to UK corporation tax are calculated by reference to sterling, with the result that capital gains and losses arising on non-sterling assets, including certain ships, can be significantly distorted by exchange rate fluctuations.
UK Urged to Change Capital Gain Calculation Methods
Moore Stephens calls for rethink on capital gains exchange rate distortions on ships. International accountant and shipping consultant Moore Stephens has urged the UK government to remove exchange rate distortions when calculating capital gains on ships. Moore Stephens tax partner Sue Bill explains, “Currently, all capital gains and losses subject to UK corporation tax are calculated by reference to sterling, with the result that capital gains and losses arising on non-sterling assets, including certain ships, can be significantly distorted by exchange rate fluctuations.
U.K. Government revises Finance Bill 2012 to favor UK Shipowning Companies
International accountant and shipping adviser Moore Stephens has welcomed the UK government’s decision to minimize the effect of new rules in Finance Bill 2012 which resulted in a potentially serious trap for existing UK shipowners entering tonnage tax. Finance Bill 2012 originally extended some anti-avoidance rules relating to leasing companies, so that they applied to existing UK shipowning companies chartering out ships which enter UK tonnage tax. But the rules have now been changed following representations made by Moore Stephens and by other shipping industry representatives.
Moore Stephens: UK Budget "encouraging" for Shipping
INTERNATIONAL accountant and shipping adviser Moore Stephens says the UK Budget 2012 contains some encouraging signs for the shipping industry. The government has stated that it will consult later this year on whether to introduce a rule allowing companies with a non-sterling functional currency to compute their capital gains and losses in such functional currency, rather than in sterling, as is currently the case. Moore Stephens tax partner, Sue Bill, says, “This is of particular relevance for UK companies which own vessels outside the UK tonnage tax regime…
UK Budget 2012 Includes Good Signs for Shipping Industry: Moore Stephens
International shipping adviser Moore Stephens said the UK budget for 2012 contains some encouraging signs for the shipping industry. The government has stated that it will consult later this year on whether to introduce a rule allowing companies with a non-sterling functional currency to compute their capital gains and losses in such functional currency, rather than in sterling, as is currently the case. “This is of particular relevance for UK companies, which own vessels outside the UK tonnage tax regime, either because the company did not elect into tonnage tax, or because the ship does not qualify for tonnage tax - for example, because it is chartered out on a long-term bareboat charter…
Moore Stephens calls for EU tonnage tax stability
International accountant and shipping adviser Moore Stephens has called for stability for European tonnage tax regimes now that the EC has begun its review of EU State Aid Guidelines to Maritime Transport. The start of the EC’s review of the EU State Aid Guidelines to Maritime Transport was announced on 14 February 2012. These guidelines cover European tonnage tax regimes as well as other state aid to the maritime sector. The EC has published a detailed and very comprehensive questionnaire regarding these state aid guidelines…
Moore Stephens Welcomes UK Tonnage Tax Revision
Accountant and shipping adviser, Moore Stephens, has welcomed the decision of Her Majesty’s Revenue & Customs (HMRC) to revise, as promised, its UK Tonnage Tax Manual to at least partly restore, on an interim basis, the pre-2009 interpretation of the strategic and commercial management tests. Moore Stephens has been working for some time with the shipping industry, and in particular with the Chamber of Shipping, in campaigning for HMRC to reconsider its 2009 reinterpretation of the tonnage tax rules.
Moore Stephens: HMRC May Rethink Tonnage Tax Changes
Moore Stephens, understands that Her Majesty’s Revenue & Customs (HMRC) has agreed to re-examine, in consultation with the shipping industry, its earlier intention to unilaterally reinterpret the UK Tonnage Tax rules to the potential detriment of many shipowners. Widely disputed changes based on unspecified ‘legal advice’ were set out in HMRC’s tonnage tax manual in September 2009. These focused in particular on a reinterpretation of the strategic and commercial management tests that are fundamental to qualification for the tonnage tax regime.
Moore Stephens Calls on HMRC to Consult
Leading accountant and shipping adviser, Moore Stephens says companies operating within UK tonnage tax could consider leaving the UK, as a result of HMRC’s decision to unilaterally reinterpret the regime rules. Sue Bill, a tax partner with Moore Stephens, says, “Given the substantial increase in the UK fleet since 2000, it is widely considered that UK tonnage tax has been a success. HMRC’s decision to reinterpret the legislation results from comments in the 2004 EU guidelines on state aid to maritime transport.
UK Budget Good News For Shipping
Leading accountant and shipping adviser Moore Stephens says that, despite mixed news for non-UK-domiciled individuals, the UK Budget 2011 appears to be good news for shipping. The bad news in the Budget, announced on 23 March, is that the existing annual remittance basis charge for non-doms resident in the UK for twelve years or more will increase from £30,000 to £50,000, albeit not until 6 April, 2012. The good news is that the government also proposes not to tax foreign income or capital remitted to the UK for the purposes of ‘commercial investment in UK businesses’…
Moore Stephens Warns: UK Shippers Review Finances
Ahead of the imminent withdrawal of a concession relating to the application of transfer pricing rules to loans made to companies in the UK tonnage tax scheme, accountant and shipping industry adviser Moore Stephens has urged companies who may be adversely affected to review their financing arrangements and to eliminate where possible any loans from UK companies to connected UK tonnage tax companies. The UK transfer pricing rules apply to transactions between a UK company and any other entity under common control. They apply to transactions between UK companies, including transactions with UK tonnage tax companies. They also apply to transactions across the tonnage tax ring-fence. However, whether or not they apply will depend on the size of the group.
Shipping in UK 2009 Budget
Shipping accountant Moore Stephens said the fact that the 2009 UK Budget does not include any measures which significantly affect the shipping sector could be regarded as good news for the industry. Although the government has been asked to make changes to UK tonnage tax, the 2009 Budget makes no mention of it. Moore Stephens tax partner Sue Bill said, “Possible changes to the tonnage tax regime could have included an amendment to the EU flagging rules excluding ships time-chartered into the fleet, and clarification of the position with regard to the changes proposed in January 2008 which were later withdrawn. But these are complex issues to resolve as they depend on agreement with the European Commission.
EU Flagging Rules to be Implemented in UK Tonnage Tax
Moore Stephens has warned that an announcement made this week by the U.K. Government could mean that shipowners within the U.K. tonnage tax regime will find that some vessels owned or operated after 1st April, 2008, and not registered under an EU flag, are outside the tonnage tax regime. The tonnage tax group or company’s fleet contains a lower proportion of EU Member State- registered tonnage than on 17th January 2004 or, if later, the end of the first period when it entered tonnage tax. The Government has now announced that the financial year 2008 will be specified as a financial year where the proportion of vessels within the UK tonnage tax regime registered under an EU flag has reduced on average in the preceding three calendar years…