Taxes Consolidation Act 1997 Schedule 18B paragraph 16

Reduction in balancing charge by reference to time in tonnage tax

Paragraph 16 provides for a reduction in any balancing charge arising under the tonnage tax regime, based on the number of complete years the company has been within tonnage tax.

• Where a balancing charge arises under Part 9 (as applied by the Schedule) or under the Schedule itself, the charge may be reduced by reference to the company's time in tonnage tax.
• The reduction is 20% of the balancing charge for each complete year the company has been subject to tonnage tax.
• The number of complete years is calculated up to the time of the event that gives rise to the balancing charge.
• After five complete years in tonnage tax, the balancing charge is fully eliminated.