Seafarer's Allowance

You may qualify for Seafarer's Earnings Deduction (SED) if you meet certain criteria. There are three steps to deciding if you have a claim, and these are explained below. Any claims must be made in a Self-Assessment Tax Return.

1. A valid claim period

This will be a period of at least 365 days beginning and ending with a period outside the UK. A period outside the UK can be a period of employment, a period of unemployment or a holiday abroad. Once a 365-day period has been attained it is carried on until there is a failure. A failure occurs if at any time during the claim period you:

a) Spend 183 or more continuous days in the UK or

b) Break the half-day rule.

The half-day rule is applied at each return to the UK. All days since the start of the claim are added and divided by 2 (A). Then all days spent in the UK since the start of the claim are added (B). The two figures are compared and where B exceeds A there will be a failure in the claim period. The claim period ends on the previous return date. A new claim period must then commence from the earliest possible date of leaving the UK. 

2. A valid foreign port for each employment in each tax year

Each employment in each tax year must include at least one voyage or part voyage that begins or ends at a foreign port. A voyage or part voyage that begins or ends at an oil or gas installation (including a rig in drilling mode) located outside the UK and outside the designated areas of the UK continental shelf can be regarded as beginning or ending at a foreign port for this purpose. 

3. The employment must be on board ships

A seafarer is someone that works on a ship. There is no definition of a ship in tax law but 'offshore installations' are specifically not regarded as ships.