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 the Revenue have proceeded to investigate claims made on Self Assessment 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. Its also inadvisable to listen to ship board 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 the Revenue 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 the Revenues decision as to whether or not your earned income is taxable or not and therefore if you are paid gross 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 the Revenue 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.

Client Wives

We offer a full advisory service to assist clients wives, starting at £25 per annum. This not only covering general tax advice, for seaman’s wives employed and paying tax, but wives who do not work, who still have sources of taxable income i.e. Bank/Building society interest, dividends from share holdings, income from property etc, etc. Prior to 6th April 1990, this income would have been treated as the husband’s. From that date, the wife is now an individual in the eyes of the Taxman. Her allowances can now be set against such income. As you can appreciate, this service does not cover wives in business or self employed.

Therefore, our service will ensure the full allowances are used to negate as much tax liability as possible, re-claiming what is due.

I have tried not to overburden you with the facts and figures in this short guide, but should you need anything clarifying or indeed if you should have any query regarding your income tax liabilities, please remember we are ready and waiting to assist you in any way we can.

Personal Allowances

Even if you qualify for 100% or non residency, this may not be the end of reducing 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 utilizing 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, the Revenue has restricted further those who are entitled to the relief, this by re-classification and not accepting offshore installation as “ships”.

Also people believing that because the Revenue have refunded their tax that they have actually checked and agreed the claim to F.E.D. anyone can ask for their tax back.

The problem arises when the Revenue decide to check on what grounds you have made the claim.

Can you therefore be sure that the claim you make will not be investigated by the Revenue 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 kept indefinately as the Inland Revenue can review the history of the claim at any time.

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