Tax Tips For Seafarers
If you work at sea outside the UK, you may be eligible for a tax relief through the Seafarer’s Earnings Deduction (SED). This unique piece of tax legislation provides you with an opportunity to claim 100% tax on your earnings abroad.
Of course, you need to prove that you worked on a ship, you worked outside of the UK for a minimum of 365 days or long enough to qualify for SED. You may also get the deduction if you are a resident for tax purposes of the UK or any of the European Economic Area (EEA) State.
How To Claim Seafarer’s Earning Deduction
You must keep records of your completed working sheet HS205, passports and visas, seafarer’s discharge books, freeboard logs of the ships where you carried out your duties, hotel bills for other receipts, and airline tickets or other travel vouchers.
You must meet the prescribed days of working outside the UK, which is a minimum of 365 days.
You must register for self-assessment and fill in a tax return if you are a resident in the UK. But if you are a resident in an EEA State, use form R43M(SED) – Repayment Claim – EEA resident merchant seafarer to claim deductions.
You must claim SED within the set time limits. For tax year 2013 to 2014, for example, you must claim by 5 April 2018. For tax year 2014 to 2015, you must claim by 5 April 2019.
What if you are a seafarer who is a non-resident in the UK or an EEA state, but paid UK tax?
You are not eligible for the SED, but you can still claim back tax using the form R43M Repayment Claim.