Post-brexit Britain wants to reinvent itself as a global shipping hub?
Plans are being drawn up to turn London into a hub for international shipping companies to register ships after the brexit transition period, in a move that would make it a direct competitor to Singapore.It has been estimated that reforming the UK's shipping tax and regulation system for this purpose would be worth £3.7 billion to the UK economy over three years and would directly create 2,500 high-quality jobs and 25,000 jobs for related companies.
The British government is drawing up a post-Brexit shipping plan to turn London into a hub for shipping companies' registered vessels and target Singapore, the Financial Times reported on December 16, citing people familiar with the matter.A source close to the project described it as a creative "blue sky idea".The plan is understood to have been submitted to the Department for Transport last week.
If the UK and THE EU fail to reach an agreement before the end of the transition period on 31 December, the UK will no longer be bound by EU state aid rules from 1 January 2021, including a tonnage tax regime for the shipping industry.Tonnage tax is a tax system levied by the customs on foreign ships entering or leaving a country's ports according to their net tonnage, as the use fee of ports and navigational AIDS.
The UK's current tonnage tax regime was established in 2000 and is subject to the EU Guidelines for National Maritime Transport Assistance.As the transition period comes to an end, industry bodies have begun discussions on tonnage tax reform as an opportunity to improve the competitiveness of the UK shipping sector and encourage ships to register in the UK.
The disagreement over state aid rules is also one of the three main points of disagreement in the TALKS.The EU hopes that the UK can strictly abide by EU rules in terms of workers' rights, environmental regulations, especially the financial assistance given by the government to enterprises, and ensure a level playing field. However, the UK demands to withdraw its autonomy in making regulations.
Low tonnage tax is just one of Singapore's advantages in attracting shipping registrations.Singapore levies a fixed annual tax of S $2.50 per net ton on ships, with a lower limit of 100 yuan and a upper limit of 10,000 yuan (S $1).As one of the world's five largest ship registration countries, Singapore registered more than 96 million gross tonnage in 2020.
In Britain, the tonnage tax is an alternative to corporate income tax.The calculation method is to calculate the tax payable of tonnage tax based on the profit of tonnage tax multiplied by the corporate tax rate.At a 20 per cent corporate tax rate, a 250 net tonne carrier would be taxed at 87.6 poundtons a year.Britain also has requirements for crew training.According to a government study, Britain's tonnage tax is 14 times higher than Singapore's.
As an old shipping center, London has good cultural and historical conditions, such as a long tradition and culture of trade and navigation, and a large number of excellent maritime personnel.Although London no longer has the functions and conditions of a global level in terms of ports today, it still maintains a global level of international shipping center with its trading market, insurance services, shipping information services, maritime services, maritime research and exchange, maritime supervision and other functions.It is learned that 20% of the world's classification management agencies are based in London, 50% of the world's tanker charter business, 40% of the bulk cargo ship business, 18% of the scale of ship financing and 20% of the total amount of shipping insurance are conducted in London.More than 1,750 shipping companies and agencies around the world have offices in London.