Seafarers Earnings Deduction Guidance
Specialist support for UK based seafarers who need to meet HMRC requirements, maintain accurate SED records and ensure their tax returns are handled correctly.
As you may be aware, we have received a number of enquiries into Seafarers Tax Returns over the last year and thought it might be useful to update you on the standards of information that HM Revenue & Customs (HMRC) expect Seafarers to keep as proof of their eligibility for the Seafarers Earnings Deduction (SED).
Seafarers Earnings Deduction Guidance
How We Support You
We help seafarers meet the requirements for Seafarers Earnings Deduction by reviewing their travel records, confirming qualifying days and ensuring their tax returns are prepared correctly. Our approach ensures your position is clearly supported and aligned with HMRC guidance.
Seafarers Earnings Deduction Guidance
Evidence to be provided annually
We guide you on exactly what HMRC expects and help you prepare the correct documentation to support your claim.
- SED schedule completed and signed. Blank forms are available on our website.
- Update of sea service to include a clear photocopy of your Discharge Book entries (including inside front cover showing your personal details) or Discharge Certificates, plus qualifying day’s sheet, certified ships movement and precise dates of entering and leaving the UK.
- Airline tickets, E-tickets, boarding passes for all UK travel.
- Passport stamps for all non EU travel.
- Holiday booking invoices and travel documentation.
- Credit/debit card receipts for expenditure incurred by you whilst on holiday. Such receipts should be obtained 1 or 2 days after arrival in your holiday destination, sometime in the middle of your stay and 1 or 2 days before departure/UK return.
- Overseas car hire receipts
Seafarers Earnings Deduction Guidance
Working in the North Sea
This is a particularly contentious area with HMRC. If you are working in the North Sea area you may have to prove all the nights that you are outside the twelve mile limit at midnight during a trip. A Discharge Book entry is no longer sufficient in this case, as HMRC are aware that a number of boats will be returning to port during their 28 days shift.
HMRC has also recently confirmed that Water and Freeboard Notices are not acceptable from now on as evidence of time outside the twelve mile limit. These notices only show dates of departure from and return to a port, not the time outside the twelve mile limit which is the main issue when it comes to investigations.
We recommend that you request a statement, signed by the Captain or Chief Officer, confirming all the dates on which you were outside the twelve mile limit during the trip. You should obtain this for each and every voyage around UK and North Sea waters. A number of ships are now able to produce a monthly statement like this but if your ship is not up to this, you might want to keep a log of your own and get the Captain to sign it.
We assess your specific working pattern and advise on whether your time qualifies under HMRC rules.
Seafarers Earnings Deduction Guidance
What Counts as
Being Outside the UK for SED
A qualifying day is one in which you are absent from the UK at midnight. Under normal circumstances HMRC regard being outside the twelve mile limit as being outside the UK. However, by concession they are prepared to accept that where a vessel leaves its UK berth before midnight and goes to a foreign port, then that is a day out. BUT, if a vessel sails from a UK port to another UK port then it is only when the vessel is outside the twelve mile limit at midnight that it is regarded as outside the UK.
Seafarers Earnings Deduction Guidance
What Qualifies
as a Vessel for SED
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 for the purposes of the deduction. The following list of offshore installations is given as a guide only:
- Fixed production platforms
- Floating production platforms
- Floating storage units
- Floating production storage and offloading vessels (FPSOs)
- Mobile offshore drilling units (drill ships, 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, you are not regarded as a “seafarer” for the purposes of the deduction and your earnings for duties performed on such a vessel or structure will not qualify for the deduction.
Where there is any doubt as to your vessels eligibility to qualify as a vessel HMRC are now asking to see the Daily Progress reports that specify the precise nature of the vessels’ work. They are not now prepared to accept a statement from the Captain of the vessel confirming that your vessel did not undertake any exploration for, or exploitation of, minerals during the year whilst standing or stationed for in excess of 120 hours. This is a change in attitude by HMRC and we realise this means keeping a lot more paperwork for each trip you do.
We apply these definitions to your travel records to confirm whether your time qualifies for SED.
Seafarers Earnings Deduction Guidance
Training and
Non-Qualifying Periods
You will be liable for tax on your earnings, despite your 100% claim running through your time at College. The reason for this is that HMRC do not regard you as a Seafarer whilst at College. You have to bear in mind that, to be classed as a Seafarer, you have to perform the duties of your employment on board a vessel. It is the same as if you go to work in your company’s offices abroad for a couple of months before joining a vessel. Under those circumstances the income earned whilst in the office is taxable, and the 100% allowance cannot be claimed on this.
Finally, if you have any colleagues who you feel could benefit from our services, we would be more than happy to help.
We review your circumstances and ensure any periods that do not qualify are handled correctly within your tax return.
Make Sure Your
SED Claim Is Correct
Send us your travel records and work details and we will confirm whether you meet the Seafarers Earnings Deduction requirements and ensure your tax return is completed correctly.
Seafarers Earnings Deduction Guidance
Frequently Asked Questions
These are some of the most common questions we are asked by seafarers about Seafarers Earnings Deduction and how the rules apply to their work. If you are unsure about your position, these answers will help clarify things.
Still unsure about your position
Send us your details and we will assess your situation and explain your UK tax position clearly.
- +44 191 740 0450
- admin@expattax.co.uk
Seafarers Earnings Deduction allows qualifying seafarers to claim relief on their earnings if they meet HMRC conditions, including working on eligible vessels and spending sufficient time outside the UK.
To qualify, you must work on a qualifying vessel and meet the required number of days outside the UK within a defined period. Your working pattern and travel records are key to determining eligibility.
A qualifying day is usually one where you are outside the UK at midnight. Special rules apply for offshore work and travel between UK and international waters, which must be assessed carefully.
Yes. HMRC expects accurate records such as discharge books, travel logs and supporting documentation to confirm your movements and qualifying days.
Not always. Specific rules apply depending on location, type of vessel and distance from the UK. Some areas may not qualify, so this needs to be reviewed carefully.
If your records are incomplete, HMRC may reject your claim or request further evidence. This can delay your tax return or lead to additional tax being due.
Yes. We review your travel records, confirm qualifying days and ensure your claim is calculated correctly and supported by the appropriate evidence.
Yes. Once authorised, we can communicate with HMRC, respond to enquiries and ensure your tax return is handled correctly.