Sea tax was started when it was realised that, since the introduction of the 1977 Finance Act, the tax position of British Merchant Seamen became somewhat more complicated. Because of the nature of the tax laws, as they apply to Seafarers, extra allowances are earned for the fact of having to work outside the UK.
It is now a fact that the majority of British seamen are paid gross remuneration, which places the responsibility firmly on the individual to liaise with the Inland Revenue to ensure their tax affairs are in good order.
Sea tax have been submitting tax returns for seafarers for over 40 years and have a vast amount of experience in the industry.
Every seaman in this type of employment comes under Self Assessment and must register with the Inland Revenue to receive a Self Assessment form. Simply ignoring the Revenue can lead to serious problems in the future. Seatax are the leading UK service for British Merchant Seamen, and because we specialise in dealing only with income tax problems we believe we can offer you a first-class service based on our knowledge and experience.
If you are a UK tax resident employed as a seafarer then Her Majesty’s Revenue & Customs (HMRC) may allow you to claim back 100% of UK income tax paid in relation to your employment on a ship as a Seafarer, provided certain qualifying criteria are met. This tax rule is known as Seafarers Earnings Deduction (SED). Vast numbers of people working at sea, presume they do not owe tax or need not declare their income as they do not reside in a particular country.
Do you qualify for Seafarers Earnings Deduction?
You can qualify for the seafarers earnings deduction if you:
• perform all your duties on a ‘ship’
• perform most of your duties on a ship, and the other duties are incidental to the duties on the ship
• worked outside of the UK long enough to qualify for the deduction – a minimum of 365 day period
• have been resident in the UK or resident for tax purposes in an EEA state other than the UK
Find out more about Seafarers Earning Deduction HERE
The word ‘ship’ is not defined in tax law, but ‘offshore installations’ used in the offshore oil and gas industry are specifically identified and are not regarded as ships and do not qualify for the Seafarers earnings deduction. Whilst there may be no tax to be paid with regard to your income from employment at sea, more often than not HMRC will still expect to receive a declaration of this income.
As many UK seafarers are out of the country for significant amounts of time, they can be eligible for certain tax concessions, as set out by HMRC.