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Smart, State Aid Guidelines, Tonnage Tax info

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  • Smart, State Aid Guidelines, Tonnage Tax info

    What is Smart, why does it exist? What are State Aid Guidelines?

    Why are the Tonnage Tax Regulations important?

    Do You Qualify for Smart Funding?

    Why does Smart exist?

    The decline in the numbers of British Seafarers was why the UK government decided to increase the numbers. This was for a few reasons, shipping is very important to the UK as an industry, it brings in a lot of money, and as island nation we rely on shipping for the majority of goods imported and exported; without it the UK would come to a standstill, we could not export our manufactured goods, we would have insufficient products imported to satisfy production of those goods, and importantly we would have insufficient food, economically it would be a disaster.
    The government could see that there would be many senior seafarers retiring and leaving the profession, in addition, many senior seafarers decide to move ashore to work in associated jobs.
    As the level of new trainees was very low and there was insufficient numbers to fill the gap, they decided to invest money in training.
    What are State Aid Guidelines?

    To allow them to do this they have to follow the State aid guide to maritime transport rules, this is in place to ensure that EU states act fairly and are not acting in an uncompetitive way towards other states, the idea was to also encourage the (re)flagging to Members States registers and to keep the maritime know-how in Europe by enhancing and protecting the employment for European seafarers. There has been a general decline in Europe of seafarers.
    State aid Guidelines can be found here:

    Para 7
    If a scheme is to be regarded as including State aid, notification is, however, required. This may be the case if, for example, a particular scheme is specifically related to on-board training
    and the benefit of State financial support is received by the training organisation, the cadet, seafarer or ship owner. The Commission takes a favourable attitude towards aid, granted on a non-discriminatory basis, to training carried out on board ships registered in a Member State. Exceptionally, training on board other vessels may be supported where justified by objective criteria, such as the lack of available places on vessels in a Member State's register.
    Where financial contributions are paid for on-board training, the trainee may not, in principle, be an active member of the crew but must be supernumerary. This provision is to ensure that net wage subsidies cannot be paid for seafarers occupied in normal crewing activities.

    Why are the Tonnage Tax Regulations important?

    Under tonnage tax rules, allowed by state aid guidelines (SAG) companies must train a cadet for every 15 deck and engineering officers they employ, if they can?t do this payments in lieu of training (PILOT ) have to be paid by the company to the Maritime Training Trust.
    The Maritime Training Trust (MTT) is a company established by the Chamber of Shipping, the
    National Union of Marine, Aviation and Shipping Transport Officers (NUMAST) and the National Union of Rail, Maritime and Transport Workers (RMT) to hold and allocate monies contributed by companies for the purpose of promoting the training of seafarers.

    The tonnage tax is a tax advantage for companies; most companies prefer to reduce their tax burden.
    The Tonnage Tax (Training Requirements) Regulation 2000 can be found here:

    For trainees to count under tonnage tax regulations they must be able to satisfy this:
    Meaning of ?eligible officer trainee?
    For the purposes of these Regulations, an ?eligible officer trainee? means a person on a
    relevant course who is?
    (a) a national of an EEA State, or a British citizen from the Channel Islands or Isle of Man,


    (b) ordinarily resident in the United Kingdom

    ?British citizen? means a person who is a British citizen within the meaning of the British
    Nationality Act 1981 (c)
    ?British citizen from the Channel Islands or Isle of Man? means a person who holds British
    citizenship by virtue of the fact that he, a parent or grandparent was born, adopted,
    naturalised or registered in one of those islands, and neither he nor any parent or grandparent
    was born, adopted, naturalised or registered in the United Kingdom, and he has never been
    ordinarily resident in the United Kingdom for five years

    1981 c. 61
    What is Smart?

    Smart funding was put in place operating under the SAG, these guidelines have just been reviewed in early October and the European Commission has decided that they can remain.
    Smart is administered on the behalf of the MCA by MATsu it is funded by the government to provide money towards the cost of training
    Smart rules and the eligibility criteria can be found here:

    Effective as at 8/11/2013 Marine Guidance Notices can be updated so please check the MCA website to make sure it is current.

    Do You Qualify for Smart Funding?

    You will need to be able to satisfy the criteria ( see Trainee Eligibility below ) for a sponsoring company to be able to access SMarT funding. If you are not British, or from the EU, then sponsors are very unlikely to sponsor you as they will not be able to get money from the government; competition is stiff for a cadet ship, and companies already turn away potential cadets who satisfy all of the criteria.
    If you are British and live in the Channel Islands or Isle of Man, then you can apply to the RFA, without the residency requirement the RFA is not SMarT reliant.
    If you are British or a national of the EU and live in the Channel Islands or Isle of man, and don?t want to wait for a year before applying contact
    Careers Jersey,
    Careers Guernsey
    Careers Isle Of Man

    They do have some arrangements in place outside of SMarT, or contacts with shipping companies.
    Or if you wish to apply to lots of companies then you will need to ensure you can satisfy the ordinary residence requirements.
    Although under the Tonnage Tax regulations ordinary residence does not mention a time frame the SMarT criteria do.
    So you will need to look carefully below to see if any of the examples fit you. Although it does not mention it members of the clergy and their families are usually treated by the UK government as they do the services; clergy and their families are often seconded as are other workers to the crown dependencies.
    ?Ordinary residence? has not been defined in any Act of Parliament, The leading case in this area is R -v- Barnet LBC ex parte Shah [1983] 1 All ER 226.

    If you are in the UK illegally you cannot obtain ordinary residence, it has to be gained legally.
    There are other cases and explanations of the term that can be found here:

    You could also contact who can give you advice about all aspect of EU law and your rights.

    8 Trainee Eligibility

    8.1 To be eligible for SMarT funding, a trainee must be:

    a. A national of a Member State of the European Economic Area, the Channel Islands
    or the Isle of Man; (evidence i.e. a certified copy 4 of the trainee?s passport, National ID card or Discharge Book where these clearly state nationality, should be kept on the TP?s file)

    b. ordinarily resident 5 in England/Wales/Scotland/Northern Ireland (support under
    SMarT will not be paid in respect of overseas nationals who are subject to employment restrictions and/or a time limit on their stay).
    This requirement must be met by all applicants who are qualifying nationals under paragraph 8.1 a, including nationals of the UK. Evidence of residency e.g. an original or photocopy of any official letter showing the trainee's UK address, should be retained on the TP's file.

    c. proficient in spoken and written English and must state an intention to be ordinarily resident in the UK following completion of their training.

    4 Copies can be certified by a Consul, Notary Public, Solicitor, MCA Marine Office, Issuing Authority Training Provider, College Lecturer or the Master of the vessel. The original documentation should be copied by the person certifying, who should endorse the copy as ?Certified true copy?, state their name, address and occupation and finally sign and date.
    5 This criterion is fact specific. It could be demonstrated by having been ordinarily resident in the UK for about a year at the time of original application made to the SMarT TP. Other examples may be considered on a case by case basis. Cases where ordinary residency is established in a shorter period could include where the trainee either owns a property in the UK or has close family ties to the UK. In exceptional cases where a particularly strong connection to the UK is established by a non-resident, the residency requirement may be waived ? an example could be a UK national living overseas with parents serving in the UK armed forces.
    Documentary evidence will be required for all applicants. The MCA?s decision on whether the criterion is met or is to be waived in respect of an application is final. In cases where it is unclear whether the criterion is met or could be waived, TPs should contact the MCA for advice

    If you are thinking of applying please check that you do fit the criteria first and if unsure, it may be a good idea to get that sorted out first. It would then allow you better access to more companies, or if you can?t apply you will not have wasted valuable time going through a lengthy process to find at the end they can?t sponsor you.
    You may find many online applications, and applications made on forms ask these questions anyway, but not all do.
    There are other sources of information this is not an exhaustive list, and you may have your own interpretations.

  • #2
    Fantastic Info, thanks very much for all your hard work producing this.
    Go out, do stuff