This Order disapplies paragraph 22A of Schedule 22 to the Financial Act 2000 for the financial year 2007 (which commences on 1st April 2007: see section 834 of the Income and Corporation Taxes Act 1988).

Paragraph 8 of Schedule 7 to the Finance Act 2005 introduced (to comply with European Community guidelines on State aid to maritime transport) a general requirement that ships entering the Tonnage Tax regime in future should be Community-flagged. Paragraphs 22B(2) and 22C(1) of Schedule 22 to the Finance Act 2000 give the Treasury power to disapply that rule on a year-by-year basis, provided (in the case of financial year 2006 onwards) that the percentage of the tonnage tax fleet which is Community-flagged has not decreased. This Order disapplies that rule for financial year 2007.

A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.