Boost for UK Seafarer Training with New Tonnage Tax Amendments

In a bid to ensure the continuous training and development of UK seafarers, the UK government has introduced amendments to the Tonnage Tax (Training Requirement) Regulations 2000. This update, effective from October 1, 2025, aims to align the Payments in Lieu of Training (PILOT) with the actual costs of training, ensuring that shipping companies remain committed to their training obligations.

What is Tonnage Tax?

The UK Tonnage Tax regime offers shipping companies a unique way to calculate their corporation tax. Instead of taxing profits, companies are taxed based on the net tonnage (carrying capacity) of their vessels. This voluntary scheme encourages companies to invest in the UK maritime industry.

Training Obligations

Companies participating in this scheme must meet specific training requirements. They are expected to train one officer cadet annually for every 15 officer roles within their crew. Alternatively, they can opt to train three trainee ratings instead of one officer cadet. If unable to meet these requirements through direct training, companies can make PILOT payments.

What's Changing?

The latest amendment increases the PILOT payments from £1,421 to £1,705 per month. This adjustment, requested by the Maritime Training Trust (MTT), reflects the rising costs of training and ensures no financial advantage for companies opting for PILOT over direct training.

Why the Increase?

The government is committed to keeping PILOT in line with actual training costs to encourage direct training of cadets. The goal is to ensure that PILOT remains a default option rather than a planned one, maintaining the core principle that companies fulfill their training commitments practically.

Implications for Businesses

Companies under the tonnage tax scheme will need to adjust to these increased costs if they fail to meet their training commitments. Notably, if a company fails to meet its obligations, PILOT payments could increase by 50% or even 100% if defaults occur consecutively.

No Major Impact on Small Businesses

The changes are not expected to significantly impact small or micro businesses, nor do they involve public sector funding. The focus remains on maintaining a skilled and well-trained maritime workforce in the UK.

Commitment to Ongoing Review

The Department for Transport will continue to review PILOT rates in consultation with the MTT to ensure ongoing alignment with training costs. This proactive approach underscores the government's dedication to enhancing the skills and training of UK seafarers, thereby strengthening the maritime sector's future.

For more information or queries regarding these amendments, contact the Department for Transport at tonnagetax@dft.gov.uk.