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Tax relief if you work on board a ship

If you're an employee and work at sea, you may be able to reduce your tax bill by getting Seafarers' Earnings Deduction.

How Seafarers' Earnings Deduction works

To get the deduction you must:

  • work on a ship -oil rigs and other offshore installations aren't ships for the purposes of Seafarers' Earnings Deduction - but cargo vessels, tankers, cruise liners and passenger vessels are
  • work all or part of the time outside the UK - this means that for each employment you must carry out duties on at least one voyage that begins or ends at a foreign port
  • be 'ordinarily resident' in the UK - or resident for tax purposes in a European Economic Area (EEA) State (other than the UK) - find out more by following the link below

You get the deduction from your earnings as a seafarer if you have an 'eligible period' of at least 365 days that consists mainly of days when you are absent from the UK. There are special rules for working this out - see below 'How to calculate the deduction'.  

Who can get the deduction

Anyone who works on a ship can get the deduction. For example, you can get it if you are employed as an entertainer, cook, travel courier or musician.  

You can't get the deduction if:

  • you are a Crown employee - so Royal Navy sailors can't get it
  • you're not ordinarily UK resident nor a resident of an EEA State (other then the UK) but there may be other tax reliefs you can claim – see the section ‘If you’re a non UK resident seafarer’ below

How to calculate the deduction

To see if you're entitled to the deduction, you need to work out whether your days outside the UK are enough to make up an eligible period. You can use Help Sheet HS205 'Seafarers' Earnings Deduction' to help you do this.

If you have more than one job

If you've got more than one job, you'll still get the deduction against your pay as a seafarer if you meet all the conditions.

Records you'll need to keep

HM Revenue and Customs (HMRC) may want to check your tax return so you'll need to keep details of:

  • completed help sheet HS205
  • air tickets or other travel vouchers
  • hotel bills or other receipts
  • passports and visas
  • seafarer's discharge book
  • freeboard logs of the ships you carried out duties on

If there's any doubt they will contact your employer for details of the ship's voyage and crew.

How to get Seafarers' Earnings Deduction

If you are ordinarily resident in the UK

If you are ordinarily resident in the UK, you'll have to complete a Self Assessment tax return, including the supplementary Employment and Additional Information pages - find out more by following the links below.

If you are resident in an EEA State (other than the UK )

If you are not resident in the UK but you are a resident of an EEA State (other than the UK), from the tax year 2011-12 you may be entitled to Seafarers’ Earnings Deduction. You should claim using form R43M(SED) Repayment Claim - EEA Resident Merchant Seafarer. You should not use a tax return to claim Seafarers' Earnings Deduction.

Time limits for claiming

The time limits for claiming Seafarers' Earnings Deduction are shown in the table below.

Time limits for claiming

Tax year              Tax year ended on                                         You must claim by                                         
2007-08 5 April 2008 5 April 2012
2008-09 5 April 2009 5 April 2013
2009-10 5 April 2010 5 April 2014
2010-11 5 April 2011 5 April 2015

If you're a non-UK and non-EEA resident seafarer

If you're not resident in the UK and not resident in an EEA State (other than the UK), but you pay UK tax because you work for UK shipping companies, you may be able to get your tax back. You'll need to complete form R43M Repayment Claim.

How to get more help

If you need help or advice, you can call the Seafarers' Helpline on 029 2032 5045. It's open from 8.00 am to 4.00 pm, Monday to Friday.

More useful links

Tax evasion

People who don't pay their fair share of tax are being unfair on the rest of us.

 

Do it online