Independent Clyde ferry operator, Western Ferries – running the route form Hunter’s Quay just north of Dunoon in Argyll to McInroy’s Point just south of Gourock, has posted a pre-tax profit of £1.6million for the year to the end of March 2008. This compares with the previous year’s profit of £1.4million. Turnover for the year to March 2008 was £6.1million as opposed to £5.6million in the year to the end of March 2007.

However, this healthy state needs to be set in the context of a long running dispute with Her Majesty’s Revenue and Customs (HMRC) which, if it goes against Western Ferries, could cost it £2million.

The company argues that it should be allowed to pay tonmage tax of £1,000 in place of the far more expensive corporation tax.

HMRC’s website says that tonnage tax is an ‘optional regime for shipping companies’. The device was brought in by the UK Government in 2000 to, as described then, ‘bring about a reversal in the decline of the UK fleet’.

If the judgment goes against Western Ferries it could have to pay something of the order of £2.1million. The company has said that its solicitors and accountants are confident that their tonnage tax staus will be upheld and hope that the issue will be resolved later this year.