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SEAFARERS

Accountants for Seafarers

Claiming Seafarers Earnings’ Deductions (SED) Explained

What is SED?

Her Majesty’s Revenue & Customs (The TAXMAN) have created a tax relief for Mariners called Seafarers Earnings Deductions (SED). However, HMRC have put qualification criteria in place that you must adhere to, to get your Seafaring Income tax free.

SED RULES
You MUST;
• be classed as Employed.
• spend at least 183 days out of the UK over a 12 month qualifying period.
• visit at least 1 foreign port, every tax year, for every employer.

EMPLOYMENT
Most Marsec companies provide Self-Employment contracts.
Even though it is a Self-employed contract, HMRC would see you as being employed as you do not have to risk your own money and the Security Co. pay for all your travel and accommodation.

The Half Day Rule?
Holidays?
There are a lot of rumours about your days!

SED Days

Your first Maritime trip out of the UK is the start of your Qualifying Period (QP). After this, any time spent out of the UK can be logged towards your SED days, for example – holidays, stag weekends etc.
If you spend too much time in the UK in between transits you can potentially fail your days.  This will mean you need to restart your QP and you will be liable for tax on your failed transits.
Retain all proof of being out of the UK i.e. ETickets, flight stubs, ferry tickets, old passports.
KEEP YOUR ACCOUNTANT UP TO DATE ON YOUR MOVEMENTS!!

FOREIGN PORT VISIT
You must visit at least ONE foreign port, every tax year and for every different employer.
Retain proof of your port visits.  This should be in your Seaman’s Discharge Book.  If not ask for a signed letter from your Security Company.

IMPORTANT!!
SED is a tax relief only available on SEAFARING DUTIES; income from being on standby in a villa is not a seafaring duty and therefore will be taxable!
Retain all documentary proof, if you are investigated and cannot produce proof, you will have to pay tax and will also be penalised heavily by HMRC!
Keep your Accountant as up to date as possible with your circumstances.
You cannot claim SED if the vessel you are working on is involved in the exploration or exploitation of mineral resource.

Remember:
You are the experts in your role…
We are the experts in Tax for Seafarers, do not believe all the rumours you hear about tax and your days, contact us for guidance and reliable information!

Please get in contact with Whittaker & Co and let us advise you on HMRC Tax rules – click here…

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