UK - Seafarer's Earnings Deduction

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

To get the deduction you must have:

• worked on a ship
• signed contract for over a year
• been operating outside of British waters - usually a minimum of 365 days
• been resident in the UK or resident for tax purposes in a European Economic Area (EEA) State (other than the UK)
  
  

You can’t get the deduction if you were:

• a Crown employee (eg, aRoyal Navy sailor)
• not a UK resident or not a resident of an EEA State (other than the UK)
  
  

If you had more than one job you’ll still get the deduction against your seafarer pay if you meet all the conditions.
 

What documents are needed for the Seafarers Earnings deduction?

• The Pay As You Earn (PAYE) form P45, or P60 or last payslip
• seafarer’s discharge book
• freeboard logs of the ships you carried out duties on
  
  

You can qualify for the deduction if:

• you perform all your duties on a ‘ship’
• you perform most of your duties on a ship, and the other duties are incidental to the duties on the ship

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. Example:

• fixed production platforms
• floating production platforms
• floating storage units
• floating production storage and offloading vessels (FPSOs)
• mobile offshore drilling units (drillships, semi-submersibles and jack-ups)
• flotels

Non-work days spent outside the UK may be counted as days of absence. A return visit to the UK can also count towards the eligible period if:

• no single return visit lasts for more than 183 consecutive days
• the total number of days you’ve spent in the UK isn’t more than one-half of the total number of days from your first day abroad to the last day of the period you spent abroad after that return visit

Days spent in the UK may only be counted if they occur between periods of absence.You can’t, for example, make a claim for a period of 365 days which consists of 183 days abroad followed by 182 days in the UK.

How many years back can you apply to get the overpaid taxes?

You can apply 4 years back from the current tax year. In the form table you can see the time limits for claiming seafarers earning deduction:

How long does it take to receive the tax refund?

On average it takes between 14 and 16 weeks from the time your documents are sent to the Tax Authorities. However,the actual time may vary on a case by case basis.