It is not uncommon among members of the yachting industry to operate without declaring their income to a governmental tax body. These Yacht owners are usually operating on the assumption that because they do not reside in any particular country that they are not subject to taxation.
Unfortunately this could not be further from the truth as there are double taxation agreements for Seafarers. For years now the HMRC have been arranging double taxation agreements with various foreign countries to ensure you are not liable for taxation in two countries. A full list of the UK’s Tax Treaties can be found here:
www.gov.uk/government/collections/tax-treaties
Information For UK Residents
If you are reading this article as a resident of the UK that would mean your world income is subject to taxation by Her Majesty’s Revenue & Customs. Regardless of whether that income is actually brought into the UK. In other words, make sure you file your UK tax returns.
Specialist Yacht Crew Tax Services (Seafarer Tax Returns)
If you own, operate or are employed on board a Professional Yacht, you could have already been affected by a Double Taxation Agreement. If that is the case specialist Tax Services for Yacht Crews are available to help, it is our hope that by reading this article, you will learn some valuable tips to help ease your transition back into the tax system. Double Taxation Agreements are complex and open to interpretation and we always recommend contacting a professional Yacht Crew Tax Service, these companies are experienced and may advise you of any potential Tax Relief entitlements such as Seafarers Earnings Deduction.
What Is Seafarer’s Earnings Deduction.
Providing you meet certain criteria and are working at sea outside of the UK, you could be entitled to Seafarers Earnings Deduction offering some much needed Tax Relief on your income.
What Are The Requirements?
To claim Seafarer’s tax relief you must meet the below criteria:
- Been employed onboard a ship or yacht
- Worked outside of the UK for a minimum of one year
- Been a resident in the UK for tax purposes
You can find information regarding Tax Deductions by visiting the Government website: www.gov.uk/guidance/seafarers-earnings-deduction-tax-relief-if-you-work-on-a-ship
Essential Tips.
- Remember to consider the half rule in addition to the straightforward day count.
- Always keep documentation to back up your claim, it is best to archive items including plane tickets indefinitely.
- If the Revenue has refunded your tax, it does not necessarily follow they have checked and agreed your claim – you may still be subject to audit.
In Summary
Double taxation agreements can be a very costly, not only for boat, ship & yacht owners but also their crews. If you work at sea we suggest you consult a specialist tax service in order to avoid the risk of costly taxation. If you are a resident of the United Kingdom there are service and benefits available to help ease that burden. It is also worth remembering that a wealth of information is available directly from the Taxback.co.uk website. We hope you have found this article concise and informative, and we would like to take the time to remind you to archive any relevant tax information such as airline and hotel tickets in order to avoid losing out on the possibility of a claim. For more information on seafarer tax contact one of our agent on info@taxback.co.uk or fill in a Seafarer Tax application form and we’ll let you know if you could make a UK tax claim.
Photo by Andrey Sharpilo on Unsplash