More than ever, specialised tax services for yacht crews are necessary to help yacht personal avoid getting into a situation where they will be liable to income tax in two countries. Many members of the yachting industry have been operating for years not declaring income to any government tax body on the assumption that they do not reside in any particular country.
H M Revenue & Customs have, for many years, been implementing double taxation agreements with many countries to ensure you do not pay tax in two countries. This means if you are a UK resident you are liable to tax on your worldwide income each year. It does not matter whether or not you bring the foreign income into the UK.
Put simply you must be liable to tax somewhere. However, if you are a UK resident you may be eligible to claim the seafarer’s earnings deduction.
Professional Yacht Crews who could potentially be caught up in a double taxation agreement include:
- In fact any personnel working on board a yacht
The Seafarers Earnings Deduction rules are the same for all, here are some pointers:
- It is a complex rule and we have seen many incorrect interpretations over the years.
- It is not simply a straightforward day court, the half rule which governs this claim has to be taken into consideration.
- If the H M Revenue & Customs have refunded your tax, it does not necessarily follow that they have checked and agreed your claim – you may still be subject to audit.
- If the Revenue has refunded your tax, it does not necessarily follow that they have checked and agreed your claim – you may still be subject to audit.
- Make sure you keep all the relevant supporting documentation for your claim – e.g. discharge book, certificates of discharge, sea service testimonials, flight documentation need to be kept indefinitely.
Seatax have been providing tax services for yacht crews for many years and are highly experienced in bringing yacht personnel back into the tax system smoothly and making sure there are no problems in the transition. Every individuals case is different so we do not approach the H M Revenue & Customs until we have checked your personal requirements and it is only when you are satisfied that we register you for Self-Assessment in order to bring your tax affairs completely up to date.