TTM06200 - Relevant shipping profits: Qualifying Incidental Activities

This category of income will be very restricted in scope and will deal with minor items of shipping related income that do not fit comfortably into core or secondary categories. The aim will be to prevent what is otherwise a wholly qualifying shipping company from having to apply normal corporation tax rules to insignificant items of ship-related income.

A company바카라 사이트™s 바카라 사이트˜incidental activities바카라 사이트™ are activities that are:

  • incidental to its core qualifying activities, and
  • not qualifying secondary activities.

The income from such incidental activities may come within the tonnage tax ring fence as 바카라 사이트˜qualifying incidental activities바카라 사이트™ if the turnover from them does not exceed 0.25% of the total turnover in the same accounting period from:

  • its core qualifying activities, and
  • its qualifying secondary activities to the extent that they do not exceed the permitted level.

Incidental activities exceed 0.25%

If the turnover from incidental activities does exceed the 0.25% level, then no part of those activities will qualify, and the whole of the income from them will fall outside the ring fence.

However, if a ship-related activity, which could (in theory) fall within the definition of 바카라 사이트˜qualifying incidental activities바카라 사이트™ is consistently returned outside the tonnage tax ring fence, then the we do not argue that it should be treated as a qualifying incidental activity for the purposes of applying the 0.25% of turnover test to other items of incidental income.

Example

If a company바카라 사이트™s income from activities is:

Description Amount

Core

£500,000

Qualifying secondary

£100,000

Ship-related incidental, but consistently returned as non-shipping income outside tonnage tax

£20,000

Other ship-related incidental

£5,000

Then the 0.25% limit will be:


(500,000 + 100,000) x 0.25%  =   15,000

The 바카라 사이트˜other ship related income바카라 사이트™ of £5,000 will therefore be qualifying incidental income, and will fall to be included in the company바카라 사이트™s 바카라 사이트˜relevant shipping profits바카라 사이트™.

(If the other incidental income had not been returned outside the tonnage tax ring fence, then the total of incidental income would have been 25,000 and all of it would have been assessed to Corporation Tax under the normal rules.)

References

Reference Link

FA00/SCH22/PARA48 (qualifying incidental activities)

TTM17281