This is the first budget since the Brexit transition period has ended, says in a article BDO’s Partner, Shipping and Transport Philip Parr. We had expected that any changes to the UK tonnage Tax regime would be positive, for example by removing the EU flag requirement, or a new election window, but there were no changes at all. However it is understood that the government is still considering enhancements to the existing tonnage tax regime.
Instead non Tonnage Tax shipping stands to gain from other measures that were aimed to help the wider economy such as Freeports, but also the new temporary reliefs on qualifying capital asset investments which will apply from 1st April 2021 to 1st April 2023.
This provides a 130% deduction on new plant and machinery that would normally qualify for the 18% main rate writing down allowances. Of more relevance for shipping is the 50% first year allowance on most new plant and machinery that would normally qualify for the 6% special rate writing down allowances. This could for example apply to new ships purchased outside of tonnage tax.
If you have any questions specific to last week’s budget announcement, please contact Philip Par.
