Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what the reasons are for HM Revenue and Customs change of policy with regards to the imposition of tonnage tax on Isle of Wight ferries; and if he will make a statement.

HM Revenue & Customs must apply the law as it stands according to the best of its judgment, with the benefit of legal advice where appropriate.

There have been no changes in the application of the policy. The legislation affecting in particular ferry services was last amended in the Finance Act 2005, in response to amendments to the EU Commission's guidelines on the application of State aids to maritime transport. Tonnage tax must conform to these guidelines.