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Seafarers Earnings Deduction Specialists
Tax Return Submissions & Tax Advice

How it Works

If you are a UK or EEA tax resident and employed aboard a ship operating outside UK waters you may qualify for an exemption, or at least a reduction, in UK tax.

You must be an employed seafarer, not self-employed.

 

You must be employed on a ship. Some vessels are specifically not regarded as ships. These include;

  • FPSOs (floating production and storage offloading vessels

  • Both Fixed and Floating platforms

  • Flotels

  • Floating storage units and mobile offshore drilling units (drill ships, semi submersibles and jack ups)

 

You cannot claim if your ship is classed as an offshore installation. This happens when it is specifically used for a “relevant purpose” and stationed for over 5 days. The term ‘relevant purpose’ generally means;

  • Exploiting or exploring mineral resources

  • Gas storage or recovery

  • Transporting things by pipe

  • Housing crew who do any of the above things.

Remember that being stationed is not the same as being anchored. You can be in waters too deep to anchor, but still be stationed.

 

tax for yacht crew

You must have a valid claim period of at least 365 days, beginning and ending with time spent out of the UK. Once you have achieved a 365 day claim it can then run on until the claim period fails.

 

The claim can start and end at any point in a calendar year. As SED is claimed via Self Assessment Tax Returns for UK residents or in the case of other EEA tax residents, by means of an R43M SED form, it can only be claimed in tax years, therefore ‘part years’ can occur.  For example; a claim starting in September one year and ending in October the following year would bridge two tax years and thus be claimed in two halves.

 

Tax for ship crew

You need to secure a foreign port for each employment in each tax year. Ideally you should have at least one voyage/trip that begins or ends with a foreign port. Proof of a foreign port visit during a trip would also count. A trip that begins or ends at an oil or gas installation (including a rig in drilling mode) located outside the UK and outside the area of the UK continental shelf can also be regarded as a foreign port.

 

You cannot spend more than 183 days in the UK at any time during the claim. You need to stay on the correct side of the half day rule. This rule is applied throughout the claim period. Put simply, you should not spend more time in the UK than out. If this does happen the claim will end at the previous return to the UK date.

 

To summarise, in order to claim SED you need to do most of your work on board a ship, be a UK or EEA resident and perform most of your employment duties outside the UK, usually for at least 365 days.

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