Automatic Workplace Pensions For Maritime Workers

A new development for seafarers and maritime workers has just been announced under new proposals from the Government.

The Department for Work and Pensions has issued draft legislation to include seafarers and offshore workers in the auto-enrolment policy whereby employers must automatically provide pensions for their staff. The scheme is due to start later this year for most employers but Seafarers and maritime workers have just been included in the proposals. These changes could effect 17,000 seafarers and 9,000 offshore workers but excludes people in the Royal Navy.

For advice on tax planning and the financial implications contact Seatax to book a consultation. Read more here in the Daily telegraph report

HMRC state that the old £100 penalty was not much of a deterrent and these new penalties, which increase over time, will get people to submit returns as soon as possible. Basically the greater the delay, the greater the penalty. These penalties to apply to Tax Returns for 2010-11 onwards.

The penalties for filing your tax return late are:

• Day one: you will be charged an initial penalty of £100, even if you have no tax to pay or you have already paid all the tax you owe
• Three months late: you will be charged an automatic daily penalty of £10 per day, up to a maximum of £900
• Six months late: you will be charged further penalties, which are the greater of 5 per cent of tax due or £300
• Twelve months late: you will be charged yet more penalties, which are the greatest of 5 per cent of tax due or £300. In serious cases you face a higher penalty of up to 100 per cent of the tax due.
  
  

Penalties for paying your tax late are:

• Thirty days late: you will be charged an initial penalty of 5 per cent of the tax unpaid at that date
• Six months late: you will be charged a further penalty of 5 per cent of tax that is still unpaid
• Twelve months late: you will be charged a further penalty of 5 per cent of the tax that is still unpaid
  
  

These penalties are on top of the interest that HMRC will charge on all outstanding amounts, including unpaid penalties, until your payment is received.

(28th August 2009) FURTHER UPDATE ON REVENUE'S DECISION REGARDING RECLASSIFICATION OF SHIPS RELATING TO SEAFARERS EARNINGS DEDUCTION

There has been a decision of the First-Tier Tribunal (Tax Chamber) issued on 18th June 2009. The decision concerns a claim to Seafarer's Earnings Deduction (SED) in Spowage and Others v HMRC. The result of the decision is that some seafarers who were not previously entitled to SED, will be entitled to SED for 2008/09 onwards. The decision results in a relaxation of the rules that previously applied so that some vessels that were previously defined as an 'offshore installation' and now defined as a 'ship'.

Seafarers and Merchant Seaman can contact Seatax for further advice on whether the changes to SED rules effect them.

An extract of the ruling is included below:

"For the purposes of this section a 'ship' does not include -

• (a) any offshore installation within the meaning of the Mineral Workings (Offshore Installations) Act 1971, or
• (b) what would be such an installation if the references in that Act to controlled waters were to any waters."

Regulation 3 of the 1995 Regulations provides so far as relevant,

• "(1) ...the expression 'offshore installation' means a structure which is, or is to be, or has been used, while standing or stationed in relevant waters... -
  • (a) for the exploitation, or exploration with a view to exploitation, of mineral resources by means of a well;
  • (b) for the storage of gas in or under the shore or bed of relevant waters or the recovery of gas so stored;
  • (c) for the conveyance of things by means of a pipe; or
  • (d) mainly for the provision of accommodation for persons who work on or from a structure falling within any of the provisions of this paragraph;

and which is not an excepted structure.

• (2) For the purposes of paragraph (1) the excepted structures are -
  • ...
  • (b) a well;
  • ...
  • (e) a mobile structure which has been taken out of use and is not for the time being intended to be used for any of the purposes specified in paragraph (1); and
  • (f) any part of a pipeline.

• (3) For the purposes of these Regulations there shall be deemed to be part of an offshore installation -
  • (a) any well for the time being connected to it by pipe or cable;
  • (b) such part of any pipeline connected to it as is within 500 metres of any part of its main structure;
  • (c) any apparatus or works which are situated -
    • (i) on or affixed to its main structure; or
    • (ii) wholly or partly within 500 metres of any part of its main structure and associated with a pipe or system of pipes connected to any part of that installation.

• (4) Where two or more structures are, or are to be, connected permanently above the sea at high tide they shall for the purposes of these Regulations be deemed to comprise a single offshore installation.