Seafarers earnings deduction allows 100% of earnings from onboard a ship to be exempt from UK income tax. A seafarer’s duties must be performed outside of the UK to be eligible for tax deduction.
To get the deduction you must have:
- worked on a ship
- worked outside the UK for a minimum of 365 days
- Been a resident in the UK or EEA State for tax purposes
You can’t receive the seafarers earnings deduction if you were a crown employee (e.g. Royal Navy) or working on offshore installations.
If you’re still unsure whether you qualify, the GOV.UK website has a self-assessment helpsheet to help you decide if you’re eligible for the deduction.
How do I complete my seafarers tax return?
Even if you do not owe tax on your income from employment at sea, as a UK resident HMRC will still expect to receive a declaration of this income.
Records you’ll need to keep include:
- A completed working sheet (HS205)
- Air tickets & travel vouchers
- Hotel bills & receipts
- Passports and visas
- Seafarers discharge book
- Freeboard logs of the ships you worked on
If you were a UK resident, you’ll need to register for a self assessment tax return and be able to give details of the tax year you are claiming deduction for. You’ll then need to submit your records including the seafarers HS205 form.
Don’t miss the deadline! Your seafarers tax return must be submitted by the 31st of January following the start of the previous tax year – meaning that you have 9 months to complete and submit your return.
Commonly Asked Questions
Do seafarers pay national insurance?
Yes. Seafarers will usually still have to make national insurance contributions. However, factors such as where you’re legally resident or domiciled will be taken into account.
How many days holiday per year can be included in the build-up of a claim?
Seafarers have no limit to the holidays they can take abroad to be eligible for deduction. All that is taken into account is the amount of days spent away from the UK.
If I have another job within the UK will this affect my claim?
A secondary employment doesn’t influence your claim in any manner whatsoever. However, you must declare this additional income on your tax return as it could impact your total tax obligation.
Can I get help completing my seafarers tax?
Yes. Here at 360 Accountants, our dedicated tax team has extensive experience supporting merchant seamen, fishermen and seafarers in completing their seafarers tax return.
We ensure correct filing to eliminate income tax for eligible periods, saving you money on your income tax, and recovering any overpaid tax
