Seafarer’s Earnings Deduction (SED)
A mariner is a person who performs all, or the majority, of their duties on board ship. Security officers, chefs, entertainers etc., may be entitled to claim Seafarer’s Earnings Deduction provided they have met the conditions to do so.
It is not simply a matter of working at sea for 183 days in a 365 day period; other conditions have to be met. There are too many to list here but the main rules are:-
You must be employed. Working through an agency does not qualify unless you have a contract of employment.
You must work on allowable vessels; you may be surprised to know oil rigs, jack-ups, FPSOs and other offshore installations including some ships are disallowed.
You must be ordinarily resident in the UK or registered for tax in an EEA state.
Your SED claim must run for a minimum period of 365 days, beginning and ending on an “out” of the UK.
You must touch a foreign port with each employer, or period of employment, in each tax year.
You can claim if you are an employee of your own limited company but frequently this is not a tax efficient option.
Meridian Taxation can advise and guide you on all matters relating to SED claims. It is imperative to get it right otherwise you could find yourself with a hefty tax bill and possibly penalty fines on top.
Concerns have been raised regarding standby days for mariners. A standby day is covered by the Seafarer's Earnings Deduction Allowance provided it is incidental to the voyage and is only for the odd day. If you frequently spend more than the odd day standing by these may not be considered incidental and could be taxable