Taxes Consolidation Act 1997 Schedule 18B paragraph 15

Plant and machinery: provisions relating to balancing charges

Paragraph 15 sets out how balancing charges on plant and machinery are treated when they arise on a tonnage tax company, and requires the company to make an irrevocable election for relief under either paragraph 16 or paragraph 17.

• A balancing charge on a tonnage tax company is treated as arising in connection with a non-tonnage tax trade and is taxed in the accounting period in which it arises.
• On the first occasion a balancing charge arises, the company must elect in writing for relief under either paragraph 16 or paragraph 17, but not both; the election is irrevocable and must be included in the company's self-assessment return for the relevant accounting period.
• Once the election is made, all subsequent balancing charges on the company can only be relieved under the paragraph originally chosen.
• No relief under paragraph 16 or 17 is available at all unless the company has made an election under this paragraph.