Clampdown by Cardiff on Seafarer's Earnings Deduction (SED) claims

There has been comment that there has been a change in the way in which SED claims are treated by the Revenue. It is being claimed that the Revenue have changed their view on what constitutes a day out of the UK. I can tell you quite categorically that there has been no change at all, it is, and always has been, the fact that a qualifying day for tax purposes is one in which, at midnight, you are outside the UK, that is outside the twelve mile limit.

As a concession the Revenue will accept that where you are leaving the UK on a voyage to a foreign port, and actually arrive at the foreign port, then as soon as you leave the UK port you are accepted as being outside the UK. Similarly, if you are flying from the UK your time of departure is taken as the scheduled time of departure for the flight you are on.

It follows on, therefore, that you can have a situation where two ships leave a UK port at the same time, one going to a UK port and the other going to a foreign port, and for the first ship it is not a qualifying day but it is for the second.

This is why we always ask our clients to provide evidence of days outside the twelve mile limit when clients are working in the North Sea or Irish Sea. It is not possible to use a blanket statement saying that, as long as a vessel sails by a certain time it will be regarded as being outside the twelve mile limit at midnight.

When the rules were changed back in 1991 SK Tax contacted the Revenue for clarification of this and this is the interpretation we were given, and the one we have worked to ever since. Also, in 2001 a letter was issued to all Tax Advisory services re-stating this interpretation, so there can be no real excuse for not understanding this point.

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