What is the seafarer’s earnings tax deduction?

What is the seafarer’s earnings tax deduction? As a seafarer working outside the UK, you can reduce your tax bill through the Seafarer’s Earnings Deduction (SED).

What is the seafarer’s earnings tax deduction and how do you claim it? Let’s find out

Who is eligible for a seafarer earnings tax deduction?

You are eligible for a SED if you work on a ship and if you rendered work outside the UK long enough to qualify. You must be a resident for tax purposes in the UK or in a European Economic area state. You can check your residency status through the online tax residence indicator of HMRC.

Keep records of your expenses and travel documents to claim seafarer tax deductions

To claim, you must keep a record of your air tickets or other travel vouchers, passports and visas, seafarer’s discharge book, hotel bills or other receipts, freeboard logs of the ships where you carried out your duties, and completed Help Sheet HS205.

Track how many days you spend outside the UK

Your days outside the UK should be long enough to count as within the ‘eligible period’, which means you should be outside the UK for the majority of the tax year.

You must be registered as self-employed with HMRC

As a UK resident, you can claim SED by registering for self-assessment and completing a tax return. If you are a resident in an EEA State, you will have to claim a deduction using a different form. If you are a non-UK or non-EEA resident working as a seafarer and paying UK tax as an employee of UK shipping companies, you may get tax back by completing our seafarer tax return form online.

Follow this link to register as self employed with HMRC

When can you file a seafarer tax refund claim?

There is a time limit that you can claim SED. The deadline for filing your UK tax return is the 31st of January following the end of the tax year. 

For the tax year 2021 to 2022, you can claim a seafarer tax refund by filing a seafarer tax return after the 6th April 2021 until 31st January 2022.

Need to apply for your seafarer tax refund? Apply online using our Seafarer Tax Refund Form.

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