Claiming Back Taxes For Seafarers In UK

Tax Credits For Seafarers In UK

An employee working at sea outside the UK can enjoy deduction in his tax bill, provided that he meets certain requirements. When proven eligible, a seafarer can get as much as 100% deduction. What the tax credits seafarers in the UK can enjoy?

Seafarer’s Earnings Deduction (SED)

To be eligible for SED, a claimant must meet certain criteria set by HM Revenue & Customs.

  • The individual must be a resident or ordinarily resident in the
  • The individual must be employed in a ship, cruise liner and
    similar vessels, but not in offshore installations.
  • The individual must meet the valid claim period, which is at
    least 365 days spent outside the UK.
  • The individual must not incur a failure, which refer to 183 or
    more continuous days spent in the UK.
  • The individual must have at least one Foreign Port Visit within
    each employment. A foreign port includes a fixed oil installation
    outside UK waters.

Once these and other requirements stipulated in EIM33000 – Seafarers’ Earnings Deduction are met, a claimant must then provide essential records, such as the following:

  • Freeboard logs of the ships you carried out duties on
  • Seafarer’s discharge book
  • Passports and visas
  • Air tickets or other travel vouchers
  • Hotel bills or other receipts
  • Completed Help Sheet HS205

As a resident in the UK, additional requirements must be complied with:

  • Register for Self Assessment
  • Completed Tax Return
  • Pages giving details of income tax for the claimed

As a non-UK resident but EEA State Resident, deduction is claimed used form R43M (SED) – Repayment Claim – EEA resident merchant seafarer.

How is SED calculated?

Based on Section 379, all earnings made during the eligible period is subject to deduction, regardless of where they arose. It doesn’t matter if the income is due to employment duties carried out in the UK or abroad. Some of the deductions that will be made first are pension contributions, capital allowances and allowable expenses.

Tax Back for Non-UK orNon-EEAStateresident

Non-UK and Non-EEA State Resident is not eligible for SED, but can get a tax back using a completed R43M Repayment Claim form. To qualify, a seafarer must meet certain criteria.

  • A period of claim of at least one full tax year that usually
    starts and end in the middle of the tax year, and where split-year
    treatment can be claimed
  • Must stay in the UK on average of 91 days or less
  • Must not be in the UK for more than 183 days within a tax

A claimant must also present an employment contract that covers at least 1 tax year.

Tax Allowance

Seafarers on a voyage to and from a foreign port for at least 161 days within a tax year can claim a tax allowance of €6,350. This also applies to individuals working on vessels servicing drilling rigs.

The allowance is an alternative to the Trans-Border Workers Relief. To qualify, a seafarer:

  • Must meet the voyage period requirement (at least 161
  • Must be employed on a seagoing cargo or passenger ship,
    registered as a European Member State
  • Must be on a voyage that begin or end in what is considered a
    port outside the state. Ports are either a rig or platform in any
    maritime area.
  • Must not have claimed Split Year Treatment from his income
  • Must not be an employee in the Public Sector

Tax concerns of any kind are complex and very hard to understand. All the provision under the SED alone will make anyone dizzy. This is why professional advice and assistance is highly recommended.

Get in contact with our agents if you have any further question regarding Seafarer’s Earning Deduction. We’re happy to help!

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