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THECHAMBEROFSHIPPINGANNUALREVIEW2011–2012


restaurant and bar sales on passenger ships on international voyages, is expected too. Ferry and cruise operators contributed extensively to the study, highlighting the practical considerations arising from passing through a sequence of tax jurisdictions, each with a different VAT rate.


Gaming machines The taxation of gaming machines is set to change in 2013, when the current combination of licence duty and VAT is to be replaced by a profi ts tax. This is to apply to machines played on ships in UK waters as well as in establishments ashore. In a very welcome move, HMRC has accepted the Chamber’s proposal that ships on international voyages should be exempt, provided that their machines are switched off in port. This matches the arrangement for duty on casino income, and averts the impossibility of trying to distinguish profi ts earned in UK waters from those earned elsewhere by a machine that does not know where it is located.


Offi ce of Tax Simplifi cation In line with the recommendations of the Offi ce of Tax Simplifi cation (OTS) Review in 2010, three historical maritime tax reliefs have been repealed. Stamp duty exemptions for transfers of ships and of seafarers’ assignments under the Second World War defence regulations were abolished in 2011, as basic stamp duty no longer exists. A redundant National Insurance provision from the National Maritime Board era is being abolished in 2012.


Shipping and the UK economy 2010


14 12 10 8 6 4 2 0


12.635


UK shipping turnover (by ship type £bn) 2010


50 2.367 3.894 40 30 6.331 4.301 2.029 1.506 Total turnover Direct


contribution to balance


of payments


Domestic/ imports


contribution Overall contribution Container


Dry bulk/ other dry


Cruise


Roll on/ roll off


TAXATION 9


Tanker/ LGC


0 2.678 2.190 12.26% 20 10 5.67% 5.64% 5.11% 24.64%


Light dues Light dues were frozen by the Shipping Minister in March 2011 at a rate of 41p per net register tonnage (NRT) with the tonnage cap set at 40,000 NRT, following a commitment given the previous December not to increase them for a period of three years. Meanwhile, the General Lighthouse Authorities (GLAs) have been required to set their budgets according to an RPI-x per cent formula, and these will produce an overall 17 per cent reduction over the next fi ve years. The Lights Advisory Committee (LAC), together


with the Chamber, is addressing three key issues: pensions; the ending of the Irish subsidy by 2016; and the ongoing rationalisation of GLA activities. Pensions are forecast to continue to consume £18.7m of their total annual expenditure of about £91m. The LAC will seek to minimise industry exposure to future GLA pension payments, following the termination of the Irish subsidy.


Top fi ve trade in services (exports) 2010


£bn


£bn


Financial Travel Air transport Sea transport


Computer & Information


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