Seafarers Earning Deduction: Great News for Yacht Crew

Tax Relief for UK Ship Workers

Do you happen to work on a ship and are unsure about the particular regulations and rules that define the Seafarer’s Earnings Deduction tax law? Within this article, you will find out whether or not you qualify and we will educate you on the details regarding this tax law. It is a great tax law that offers a UK residents who are employed as a seafarer who works outside of the country on a ship the ability to pay absolutely no taxes on his or her earned income. This is an excellent piece of legislation that was created to help with the competitive labor market and to help with more UK residents being spread around the seas for military reasons. We will show you whether or not you qualify for this special piece of legislation when you continue reading below.

There are guidelines and rules that are needed to be followed in order to receive this tax break. You need to prove that you worked on a ship and that your duties were working on the ship or were directly related to duties on a ship. Secondly you have to be outside of the UK working for 365 consecutive days or longer to qualify for the Seafarer’s Earnings Deduction tax deduction. You can also receive this deduction if you are a resident for tax purposes of the UK or any other European Economic Area State.

Always Speak to an Accountant to Get a Full Understanding of Your Tax Position. Image credit: Prowess

So how exactly does one go about registering for this special tax exemption? When one researches the tax laws there is not a lot explained and it is hard to understand. However, we have outlined the basic rules and things you have to complete below. To begin with, you will need to keep your records including such things as your HS205 worksheet, passports and visas, seafarer’s discharge books, freeboard logs of ships where you worked, hotel bills, airline tickets, travel vouchers and other related receipts. It pays off to hang on to these as you can be reimbursed for them. Also as mentioned earlier to you have had to spend at least 365 consecutive days outside of the UK to qualify for this tax exemption. Unfortunately, military personnel does not qualify for this tax discount, however, this may be different in the future if the laws are changed.

You have to claim the Seafarer’s Earnings deduction within set time limits to benefit from the deductions. As an example, for the tax year 2014 to 2015 you would have to make your tax claim by the fifth of April in the year 2019. If you happen to be a seafarer who is not a resident of the UK or an EEA State but paid UK tax, you would not be eligible to qualify for the SED. However, you would be allowed to claim back tax using the R43M Repayment Claim.

Not every seafarer is destined to be able to use the Seafarers Earnings Deduction. In order to take advantage of the tax deduction, you have to be employed on a “ship” However what a “ship” actually is, is not clearly defined by tax laws. But if you work in the oil or gas drilling industries there is a chance that you will not be eligible for the tax discount. For UK residents who are employed on offshore installations are not entitled to the tax break. What constitutes an offshore installation is defined amongst the laws. We will outline what is considered an offshore installation as the following:

  • floating and nonfloating platforms
  • floating production storage and offloading vessels
  • storage units that are floating
  • mobile offshore drilling vessels
  • drill ships
  • semi-submersible drilling vessels
  • flotels
Ship Crew Qualify Under SED Rules If Employed Offshore For Extended Periods. Image credit: Work on Yacht

Also as we mentioned before people who are employed by the military who spend time in foreign territory are exempt from the SED. Another thing that is highlighted in the laws is that a Seafarer must enter and exit from ports that are outside of the United Kingdom. The Seafarers Earnings Deduction has not been around as a law for a long time and has undergone a few different variations and updates throughout the years. Ultimately it benefits all United Kingdom seafarers and makes the global competition of the labor market more easy to navigate and benefit from.

It is worthwhile to do all your taxes and to do them properly. Not taking advantage of this tax exemption would be a mistake and not declaring your taxable income would be even worse. If you are employed as a Seafarer and work in foreign ports and waterways then, by all means, collect and keep all your receipts related to your employment.

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The author wishes to thank the following websites for use of reference material, links and imagery:

What’s a Conveyancing Solicitor & What They Do

The process of transferring a property from the seller to the buyer is referred to as the conveyancing process. There are various factors that come into play during this phase, as well as certain tasks that will need to be seen to. This is after all a legal process, and you need to make sure that everything is being done according to the law so as to avoid any problems later on. Therefore the service of a conveyancing solicitor is of the essence.

Many Home Owners Now Sell Their Properties Themselves. Image credit: FreeImages.com

In the UK, a conveyancer is a qualified solicitor who has specialised in the field of real estate transfers in his or her practice. The conveyancing solicitor will be handling the conveyancing process on your behalf, and so thanks to their expertise you would not need to worry about any of the technicalities and intricacies related to this legal process. The conveyancing solicitor will be handling the legal as well as the financial matters that revolve around this phase. For instance, there will be the title transfer to see to, as well as the settlement of obligations relating to the transactions. The conveyancing solicitor will also be overseeing that throughout this process the client’s rights are being duly safeguarded. Needless to say there are going to be instances where one of the parties does not keep their original promise, or there could be certain negotiations. Therefore having a conveyancing solicitor to assist you is of great help to avoid any problems or complications.

It is important to point out that, unlike what most people think, conveyancing is not just a single and straightforward transaction so that the property passes from the seller to the buyer. There are several parties involved in reality, including the banks who could be lending to both the seller and the buyer, the insurers, any agents, tenants, and the local authorities who may come into play. So, with all of these individuals or entities to handle, the transaction becomes more complicated and complex, and a conveyancing solicitor will be basically overseeing all of this and make your life much simpler. Therefore getting the right conveyancing solicitor’s service is very important, and one should seek such assistance as soon as the decision to buy a property, or to sell has been made.

Your Estate Agent Will Give You The Keys Once The Property Has Exchanged. Image credit: Huffington Post

The conveyancing solicitor will be ensuring that the ownership of the property is seen to properly from start to finish, and this includes the registration of the said property into the buyer’s name via a title document. This is a critical legal process which guarantees that the lawful ownership of the property in question is being obtained, and there will need to be a deed of transfer drawn up, as well as registered, every time a property is sold. Thus the role of a conveyancing solicitor is not only of importance, but also of peace of mind to a client, who may rest assured that everything is being handled well, and as much as possible, without delays and complications. The conveyancing solicitor will be dealing with the various parties involved in the sale of the property, see to the documentation, signatures and any other aspects which will be central in the completion of this important transaction to execute it fully and lawfully.

Which is Best: Proactive Maintenance or Reactive Maintenance?

Choose the Most Appropriate Maintenance Schedule for Your Premises

Any business tries to ensure that it is running at its maximum efficiency. In most cases, this calls for the use of machines and equipment, and whenever one of such assets breaks down or requires repairs or maintenance, research shows staff productivity reduces when equipment is faulty. The bigger a business or commercial establishment is, the more machines and equipment there will be. Consequently, breakdowns and repairs end up being quite common. This highlights the need to carry out maintenance. However, there are two approaches to do this in reality. There is Reactive Maintenance which is carried out once a failure or breakdown occurs. And then there is Preventive, Predictive or Proactive Maintenance, which basically involves carrying out maintenance according to a plan, so as to reduce the probability of machines and equipment developing faults or failures. Needless to say both of these approaches have their respective pros and cons. One method may be suitable for one business, but it may not be feasible for another. So, it all depends on the type of business, the size of the building, the number of machines and pieces of equipment, the staff requirements and the budget. Let us elaborate a bit further on these two types of maintenance.

Reactive Maintenance

With reactive maintenance the technician or handyman will be called in to solve a problem once it occurs. So, be it a computer problem, a machine that is not working properly, or a piece of equipment which has developed some sort of fault; you will be waiting for the problem to arise to take action, thus the name, reactive, which means that you are reacting to the problem. In this scenario there could well be a significant negative impact on productivity, especially if there is no backup available. Imagine there is a machine which forms an integral part of the production process, and it is not working properly. Once you call in a technician to diagnose the problem and fix it, you will also be ending up with the production process halted. As a result, until the machine is fixed or replaced there is going to be a loss of efficiency, limited or no productivity, idle workers, and less sales and profits. Considering this scenario it is important to be aware of the importance of certain machines or equipment, and so reactive maintenance may not be a reasonable option in this case. Also, if the commercial establishment is a large one it is going to be quite difficult to keep up with various faults that arise on the many machines. Generally larger companies opt for preventive maintenance so as to be able to keep up with the demands of the various machines and equipment. In order to decide whether reactive maintenance is the best option for your business, you need to consider three main factors, namely:

  • Can you afford to have unpredictable downtime?
  • Can you afford to have a technician to see to the maintenance periodically?
  • Consider the costs involved in either case, and try to establish which one is the most cost effective option.
Typical Reactive Maintenance Performance. Image credit: Bjarni Ellert Ísleifsson

Planned Preventive Maintenance

Preventive maintenance is often considered to be more feasible, particularly because in most cases it tends to increase the lifespan of assets, and thus also reduce the costs associated with replacements or costly repairs. When maintenance is carried out on a regular basis, machines or equipment are more likely to function efficiently, and this results in cost savings as well. Thanks to a preventive maintenance plan you are more likely to retain efficient productivity, reduce unplanned downtime or idle time, and so there are savings in that aspect too. However, it is important to note that preventive maintenance also has some drawbacks. For instance, some machines may have become outdated and despite the fact that they are running well you might still be better off replacing them with more cost effective and technologically advanced ones. Excessive maintenance may turn out to be a problem too, not to mention the time required to schedule maintenance. If you were to add up all the time spent on maintenance jobs over a span of years it might end up amounting far more than the repairs which might have been needed in reality. So there is both time as well as the cost factor involved. It is important to focus on these aspects to make the decision of whether to stick to preventive maintenance or not;

  • How many machines do you have, and how much time and money is it going to take to see to their maintenance?
  • Is it worthwhile to increase their lifetime, considering their cost, and possible replacement?
  • Can you afford preventive maintenance?
Planned Preventative Maintenance vs Support Requirements. Image credit: ICU

Answering these questions may put you in a better position to make a good choice.