Tax Advice For Seafarers

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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

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.

Below are some examples of offshore installations, given as a guide only:

• fixed production platforms
• floating production platforms
• floating storage units
• floating production storage and offloading vessels
• mobile offshore drilling units (drillships, semi-submersibles and jack-ups)
• flotels

Any vessel engaged in exploitation of mineral resources by means of a well whilst standing or stationed in any waters, is an offshore installation. If you work on an offshore installation anywhere in the world, then your earnings for duties performed on such a vessel or structure will not qualify for the Seafarers earnings deduction. This includes earnings for duties performed in periods where the vessel or structure:

• is moving between locations
• has temporarily changed its use
• has temporarily been taken out of use

For more information, see Schedule 27 

The employment duties of a seafarer are regarded as being performed outside the UK if they are carried out on a vessel that’s engaged on a voyage or part voyage which starts or ends with time outside the UK. For this purpose, the UK sector of the North Sea is treated as part of the UK.

If you had more than one employment in an eligible period, you may only claim the Seafarers earnings deduction for those in which you performed duties outside the UK. An ‘eligible period’ is made up mainly of days when you are absent from the UK. If you are out of the UK by/before midnight on a particular day then this may be counted as a day or absence. A return visit to the UK can also count towards the eligible period if:

• no single return visit lasts for more than 182 consecutive days
• the total number of days you’ve spent in the UK is not more than one-half of the total number of days from your first day abroad to the last day of the period you spent abroad after that return visit

Days spent in the UK may only be counted if they occur between periods of absence. You cannot, for example, make a claim for a period of 365 days which consists of 183 days abroad followed by 182 days in the UK.

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