Schedule 32 - Tonnage tax: restrictions on capital allowances for lessors of ships
Finance Bill
7:45 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
When the tonnage tax was established, certain shipping, particularly luxury cruise liners and large gas tankers, should not have had access to tonnage tax relief. The Standing Committee discussed the question of tax authorities going too far or being too draconian in trying to cover every possible avoidance. However, a new device was developed, which would have led to a massive loss of tax, which we did not intend, and the Government announced last year that we would move to prevent that. We consulted with the industry to ensure that we were closing only that device and not weakening the tonnage tax, and that is what we have done.