TTM11400 - Offshore Activities: Allowance for training costs

Overview

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, per paragraph 114(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 paragraph 114(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, then the excess allowance may be carried forward and set against tax on offshore profits in a subsequent accounting period, per paragraph 114(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, per paragraph 114(5).

References