You are leaving the UK to work on board a ship

There is a special deduction for people who normally live in the UK but are working onboard ships. So if you are leaving the UK in order to work onboard a ship, take note.

The special deduction is called the Seafarers’ Earnings Deduction. The Seafarers’ Earnings Deduction permits 100% of on-board earnings to be free of UK income tax. There are a number of conditions. The most important is that the earnings must relate to a qualifying of at least 365 days. This doesn’t mean that you need to be on-board ship for a year without coming ashore in the UK. It means that you have to look at a period of 365 days and be very careful about returns to the UK. The qualifying period does not need to cover a tax year. 

Care is needed here to interpret the meaning of ‘ship’ for tax purposes. Oilrigs and other offshore installations aren’t ships for the purposes of the Seafarers’ Earnings Deduction. Cargo vessels, tankers, cruise liners and passenger vessels are.

To be eligible for the Seafarers’ Earnings Deduction you must be ‘resident’ and ‘ordinarily resident’ in the UK. To learn more about these terms, please read our the relevant pages within the ‘Migrant/New to the UK’ section of this website:  http://taxaid.org.uk/situations/migrant-workernew-to-the-uk

For more information, please see the HMRC website at http://www.hmrc.gov.uk/incometax/relief-ship.htm , or contact the HMRC by phone or email at: HMRC Seafarers\’ Enquiry Line.