# End For Uk Fleet?



## PeterDD (Nov 9, 2009)

Lloyds List 10/5/11 reports that there is a move by HMRC to change the rules on tonnage tax:


"NO TONNAGE tax, no British shipping; it really is as crude as that. Only the introduction of the measure 10 years ago saved the maritime sector in the UK from complete and utter collapse.

So when top notch taxation accountants warn that planned changes could spark a mass departure from the UK flag, everybody concerned with the future of the industry in this country needs to take notice.

That is precisely what is presently on the cards, according to leading maritime beancounter Moore Stephens. HM Revenue & Customs wants to tweak the small print so that technical management of vessels, as well as commercial management, must be based in the UK if operators want to qualify for the scheme.

It is, of course, always necessary to discount for special pleading. Accusations are sometimes heard, particularly from the unions, that tonnage tax amounts to a generous handout to the undeserving rich, and in truth, such claims are not without foundation. Certainly, it is difficult to think of any other sector that enjoys special treatment on a comparable scale."

We live in a time of austerity - is it right to continue to give tax breaks to shipping companies that do not have technical management in the UK?


----------



## James_C (Feb 17, 2005)

No it is not, and never has been.
The Tonnage Tax is single handedly ruining the reputation of the British flag and British Seamen in general - it has done absolutely nothing for the latter.
The sooner it's gone the better.


----------



## Ray Mac (Sep 22, 2007)

James_C said:


> No it is not, and never has been.
> The Tonnage Tax is single handedly ruining the reputation of the British flag and British Seamen in general - it has done absolutely nothing for the latter.
> The sooner it's gone the better.


Very True, absolutely nowt for the British seamen. The Red Duster now a FOC.

Ray


----------



## stein (Nov 4, 2006)

And the Norwegians move to Britain for tax reasons. I read that John Fredriksen, with the world's largest tanker fleet, was now (I believe) Britain's seventh richest man? And I understand most of his shipping empire is London based? Might be owned elsewhere of course - but not in Norway.


----------



## Iain B (Apr 28, 2007)

I don't think there is any doubt that the Tonnage Tax scheme has kept alive British Shipping. If the Tonnage tax schemes go then it will surely have an effect on the size of the UK fleet and UK shipping infrastructure. What Tonnage tax has not achieved for British seamen is different question, but removing tonnage tax won't do anything to improve the prospects for British seamen and can only further weaken the UK maritime infrastructure? 

UK shipping makes a very significant contribution to the UK economy. I attach a summary of the latest Oxford Economics report which has now been published.

The full report can be found at this link 

http://www.maritimelondon.com/Maritime UK statistics.pdf

Regards

Iain 


British maritime services make £13bn contribution to UK GDP


A report assessing the importance of the UK maritime services sector - including ports, shipping and professional services - estimates that the sector creates 227,000 jobs or 0.8% of total UK employment. Produced by Oxford Economics on behalf of Maritime UK, the report entitled The Economic Impact of the UK Maritime Services Sector was presented to Secretary of State for Transport on 27 April.

Other key findings of the report are that the UK maritime services sector:


Contributes GBP 13.1 bn to UK GDP
The report estimates that the maritime services sector made a direct £13.1 billion value-added contribution to GDP or 0.9% of the UK total. Therefore, the maritime services sector made a larger contribution to UK GDP than both the civil engineering and electricity distribution industries.

Generates GBP3.1 bn for the UK Exchequer 
And, in addition, the maritime services sector directly generates over £3.1 billion (or 0.6% of total government revenue) for the UK Exchequer, through a combination of taxes paid by both employees and firms in the industry.

The industry also supports considerable activity in other sectors. 
Service providers will source goods and services from UK-based suppliers, which, in turn, have their own suppliers (some of whom will be based in the UK) and so on. In addition, people employed by the maritime services sector and its suppliers will spend their wages on other goods and services in the UK economy. Such effects are typically referred to as the indirect and induced impacts.

Including indirect and induced effects, it supported 531,000 jobs and contributed GBP26.5 bn to UK GDP
Including direct, indirect and induced impacts, the maritime services sector is estimated to support 531,000 jobs or 1.8% of total employment. Moreover, once these multiplier effects are accounted for, the sector makes a value added contribution of £26.5 billion (1.9% of total) to UK GDP. 

Generated £7.8 billion for the UK Exchequer.


----------



## Gollywobbler (Dec 4, 2010)

James_C said:


> No it is not, and never has been.
> The Tonnage Tax is single handedly ruining the reputation of the British flag and British Seamen in general - it has done absolutely nothing for the latter.
> The sooner it's gone the better.


Hi Jim

I did a temporary job for the MCA a few years ago, during the course of which I spent a lot of time with one of the MCA's directors, who in turn was very chummy with all the people at Lloyds. 

Doug (the Director) told me that without the Tonnage Tax exemption, he didn't think it would be possible increase the number of ships on the UK Register. It must have been around 2006 or 2007 when he told me that there were moves afoot in the Government to reintroduce the Tonnage Tax but he said that the MCA were vehemently opposed to the idea. 

The Tonnage Tax was nothing to do with my own work - it was just "one of those chats" that work-colleagues tend to have because the subject interests one of them and the other one just happens to be present at the time. So I listened and noted what Doug said and then forgot about the whole thing till I started reading this thread. 

As far as I could gather, the MCA believes that the current taxation arrangements are a Good Thing. On this thread, I seem to be reading that it is a Bad Thing?

If you or someone can spare some time, I would be very grateful for an explanation about why the current tax-arrangements are lousy for British Seafarers and none too good for the UK fleet, please. 

I'm merely curious to try to understand this issue in more detail - I don't actually have anything to say about it myself. I have never had anything to do with the shipping industry except as a ferry passenger but, until now, I hadn't even realised that there are any bones of contention about the current shipping taxation arrangements so I'm wondering why the present arrangement seems to be approved of by the MCA but not approved of wthin the industry? 

My boss and the people in the shipping industry all seemed to be very good friends with each other and as far as I could gather the MCA was/is supposed to oil the wheels for the industry? 

As I say, I was only filling in doing a temporary job for a couple of years and I had chosen the MCA because I sail small boats as a hobby. I knew absolutely NOTHING about the Merchant Navy except that it exists and I really don't know any more than that about it even now. But I am curious - albeit that it is a purely academic interest. (When I joined the MCA, I rapidly discovered that professional and recreational mariners really have nothing in common and nor do their respective vessels. I had just made vague assumptons about the idea of "the sea" - which assumptions were wholly erroneous, I soon found out!)

Many thanks

Gill


----------



## Andrew Craig-Bennett (Mar 13, 2007)

I must stick a paw up and declare an interest; I manage ships that are technically managed in the UK and which fly the red ensign but which would not be here were it not for Tonnage Tax.

As regards the employment of British seafarers I am in complete agreement with Nautilus, (which is just as well as I'm a member) - ships in home trades should employ British seamen; ships in international long haul trades are a different thing.

HMRC are indeed in danger of killing the goose that lays the odd egg to the tune of £11Bn a year; my own employers feel that they have been harrassed unreasonably, they are thinking of leaving the UK, and frankly, I agree with them. 

What do you do, when you get asked questions by HMRC like, "Explain why the earnings of this ship (a 55000dwt handymax bulker) fell from US$50,000 per day to US$ 3,000 per day in Novermber 2008?" (this is a perfectly genuine example)

Evidently these people, with their index linked pensions, were unaware of the world financial crisis!

It should be remembered that every ship in Tonnage Tax, whether she has Brits in the crew or not, employs Brits ashore and trains cadets. 

As for the "flag of convenience" tag, let's remember that the TITANIC was owned by an American company and was flying the red ensign as a flag of convenience. There was nothing wrong with the de Larrinaga fleet, LOFs, etc etc.


----------



## Iain B (Apr 28, 2007)

The following press release was circulated today by the UK Ship Registry


UK Flag Reaches 18 Million GT

In June, gross tonnage (GT) on the UK Flag passed through the 18million mark for the first time since 1983. The UK Flag has grown approximately 165% since 2001 following a period of decline in the 1980s and 1990’s, reaching a low point of 4 million GT. Since 2001 the UK Flag has made a tremendous recovery.During the last quarter 36 ships joined the UK Ship Register (UKSR) with a combined gross tonnage of just under 1.2mg GT. Of these new registrations 23 were new builds, whilst the remainder transferred in from other flags.These new registrations include seven container ships; one bulk carrier; three general cargo ships; nine tankers; one passenger ship; one vehicle carrier and fourteen vessels of other types. Companies registering ships with the UKSR in the last three months include Zodiac Maritime Agencies, CMA CGM, Wappen Reederei, Stolt Tankers, Wallem Ship Management, ThomeShip Management, CPO Tankers, StenaLine and Gulf Offshore.The average age of vessels flagging-in during the last quarter was 5 years, whilst the average age of vessels leaving the register was 13.As at the end of June 2011 the UK Ship Register stands at 1,486 ships with a gross tonnage of 18,054,301.


----------



## 12-4 (Oct 5, 2005)

Always look back to history for guidance - We lost the Americas because of the antics of the British Revenue service particularly in reference to the ship owner John Hancock who was imprisoned for 5 months before being released without charge. You will find Hancock's signature on the Declaration of Independence - revenge served very cold!


----------



## slick (Mar 31, 2006)

John Hancock signature was I believe the first on the Declaration of Independence?

Yours aye,

slick


----------



## Iain B (Apr 28, 2007)

James_C said:


> No it is not, and never has been.
> The Tonnage Tax is single handedly ruining the reputation of the British flag and British Seamen in general - it has done absolutely nothing for the latter.
> The sooner it's gone the better.


We use a number of inputs (indicators) in assessing marine risks and one of these is the flag of the ship. Personally I don't think that the flag has anything like as much influence over the 'quality' of the tonnage on it's register as they like to think. However whichever data source you use (PSC data, Casualty data, other 2nd party inspction info) you will find that the UK flag rates very highly as high performing ships. Paris MOU, Tokyo MOU, USCG Qualship 21 etc.

That perhaps was easier to achieve when the UK fleet was much smaller and a fair proportion of it was in domestic trades. Now the UK fleet is significantly larger and trading globaly it is interesting to see high performance results from such organisations as the USCG. 

I know there are some strong opinions about the good old days of the UK Flag, but what reputation has been lost, and how? Do you mean in the sort of socio-political context of a national fleet and a national carrier?

Over the last few years I have sent a lot of time in the US and I don't think anyone (other than perhaps the unions) would suggest that the Jones Act has been good for US shipping or US seafarers? 


Iain


----------

