Seafarer’s Earnings Deduction Overview

Seafarer's Earnings Deduction Overview
The Seafarer’s Earnings Deduction (SED) is one way for employees working at sea, or on a ship to reduce their tax bill. But it is only applicable to those who qualify.

What is considered a ship by tax law?

While there are no specific rules or information about the kind of ship that employees have to be in to qualify for SED, offshore installations have been specifically identified as not a ship. So, if you are working on an installation, you may not qualify an SED claim. Some of the work areas they consider offshore installations are fixed production platforms, floating storage units, floating production platforms, mobile offshore drilling units, flotels, and floating production storage and offloading vessels (FPSOs).

What qualifications need to be met to claim SED?

First off, all your duties must be performed on a ship. If there are other tasks that you need to perform off the ship, they must be incidental your ship duties. You can only claim SED for duties performed outside the UK during the qualifying period, which refers to days that you’re absent from the UK. Other qualifying periods are: no single return visits that last for more than 183 days spent consecutively. Intervening days you spent in the UK must not be more than half of the days you spent abroad. For instance, to make an SED claim for a period of 365 days, you must spend 275 days abroad and only 90 days in the UK. Because the UK tax system is quite complex, it is best to seek professional advice from tax specialists, especially where your SED claims are concerned. Apply for your tax back here

Photo by Nilantha Ilangamuwa on Unsplash

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