Well-placed sources have told TradeWinds the UK Treasury may soon call a snap budget in which amendments to the UK tonnage tax could feature.
The UK Secretary of State for Transport, Chris Grayling, is said to be keen to make improvements to the regime.
Others within the Department for Transport (DfT) are said to be pushing for reforms that are more radical than those recommended in a review conducted by DfT, the UK Chamber of Shipping, UK Ship Register, HM Treasury and HM Revenue & Customs.
The UK tonnage tax has been a huge generator of revenue and has boosted the UK-owned fleet by an average 5.1% year-on-year growth since the regime’s introduction in 2000.
In 2017, consultancy CEBR estimated the value of tonnage tax to the UK economy was around £3.1bn in 2015 alone.
Currently the UK regime is bound by the 2004 EU State Aid Guidelines (SAGs), which provide criteria for the compatibility of state aid to maritime transport with the EU internal market.
Upon leaving the EU, the UK will no longer be bound by these SAGs and is undertaking a review of how its tonnage tax may be improved post-Brexit.
However, an early draft of the tonnage tax review document, which has been seen by TradeWinds, said the fundamental principles of UK’s future regime are unlikely to deviate widely from the existing SAG model.
HM Treasury, which oversees the UK’s tonnage tax policy, told TradeWinds it does not comment on tax matters.
