Pitfalls and Rules

This section outlines just some of the issues that are of vital importance when it comes to tax for merchant seaman. We deal with all these issues and more on an ongoing basis on your behalf so you don’t need to worry about them:



Now that HMRC has proceeded to investigate claims made on Self-Assessment Tax Returns it has come to light that many are incorrect.

The penalties for making a claim incorrectly can be very severe indeed.

Seatax Ltd have invaluable experience with regard to the complexities that surround claims to the 100% seafarers earnings deduction as it is not as straightforward as many seem to believe. It is also inadvisable to listen to shipboard talk with regard to claims, as this has in many cases led to disaster. Always check out through proper channels do not listen to gossip. There are seafarers who think that because H M Revenue & Customs have not contacted them and feel they spend enough time out of the country to qualify for the 100% SED (Seafarer’s Earnings Deduction) that they have no problems. This is not the case as it is ultimately H M Revenue & Customs decision as to whether or not your earned income is taxable or not and therefore if you are paid gross (i.e. not having tax deducted at source) you must declare your income to them at the end of every tax year.

Do not be lulled into a false sense of security because H M Revenue & Customs have not got round to investigating your claim.

Let Seatax ensure you are entitled to the claim before it is entered and sleep easy at night.

Personal Allowances

Even if you qualify for a 100% claim or Non Residency, this may not be the end of reducing your tax liability. By using your allowances properly, it may be possible to relieve the burden of income tax from other sources of taxable income, this by means of utilising unused allowances.

Deduction Rules


One of the most important aspects of our service is to identify and claim 100% exemption.

You will probably have been aware of many conflicting ways in which you can qualify. Rumours are plentiful and everyone has their own ideas. Through talking to seafarers we have seen many incorrect interpretations used by individuals concerning this complex rule and in our experience proved to be very costly! Remember it is not as simple as purely doing a “day count” the half rule also has to be taken into account.

Since 2004, H M Revenue & Customs has restricted further those who are entitled to the relief, this by re-classification of qualifying vessels.

Also, people believing that because H M Revenue & Customs have refunded their tax that they have actually checked and agreed the claim to S.E.D. Problems arises when H M Revenue & Customs decide to check on what grounds you have made the claim.

Your claim can be investigated by H M Revenue & Customs at a later date. This appreciating that they may appear to pass your claim initially. However, the evidence of the claims, i.e. airline tickets need to be kept indefinitely as H M Revenue & Customs can review the history of the claim at any time.

As we are constantly reviewing H M Revenue & Customs interpretations why not make use of our experience in this field to handle your claim.

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