TTM11210 - Offshore activities: Offshore profits - HMRC internal manual - GOV.UK

A qualifying ship that is engaged in offshore activities remains a qualifying ship.  The offshore profits remain relevant shipping profits.  The special rules therefore contain a number of

provisions to ensure that offshore profits are brought into charge as intended.

If a ship (to which the special rules apply) spends the whole of an accounting period engaged in offshore activities, then its profits for that period will be computed using ordinary (that

is, non-tonnage tax) Corporation Tax principles.

If the ship spends part of an accounting period engaged in offshore activities, and part of the year working elsewhere, then at least two computations will be required: 

Normal Corporation Tax principles require the offshore profits to be calculated by reference to the income and expenditure that relates to the offshore activities.  Although it may be

appropriate to time apportion some of the expenses incurred during the accounting period that cannot be allocated to specific days in the period, it will not normally be appropriate to

calculate the income by time apportioning the income for the year as a whole.See TTM11220 for examples.

For a ship with both ‘offshore’ and tonnage tax days, the tonnage tax profit should be computed for the number of days when the ship is not engaged on ‘offshore activities’.