Ask the Team a Question

If you have any questions regards the 100% claim, FED claim, qualifying days, foreign sea service, seafarers tax, self assessment, your tax return, foreign earnings tax or any aspect of our service in general please don't hesitate to ask us.

Hi Dominic,
I can assure you that there is absolutely no statutory limit on the number of days holiday that can be included in a 100% claim. The law talks only of the number of days spent out of the UK, it makes no reference to whether these are work days or holidays.

Moral of the story is don't listen to so called experts ask me!!
Cheers
Steve King

Hi Steve,

As always when talking about Revenue interpretations there is scope for great debate! However, the information that we have from the Revenue is that they consider a vessel to cease being a vessel for tax purposes on the day it goes into dock to undertake conversion to an FPSO. Even though the FPSO then sails itself halfway round the world to its permanent location, the Revenue do not regard it as a vessel for the 100% SED purposes. Their argument is that to be considered as a vessel it is necessary to consider the function of a vessel as well as its abilities. Therefore they consider the FPSO is not a vessel, despite its ability to sail itself round the world, because its function is to operate as an FPSO.

As always, any Revenue interpretation is open to challenge but this would involve a court appearance with its extremely expensive legal charges.
Please do not hesitate to get back to me if you require any further clarification.

Regards
Steve King

First of all do not be too worried about this, it is not a change in the law but merely a clarification of what constitutes a ship for tax purposes. There has been no change to the general rules regarding SED claims. Basically what has happened is that the rules regarding offshore installations have been linked to the Health & Safety regulations to determine what can be regarded as a vessel for tax purposes. From April 2004 there will be separate specific rules in the Taxes Acts regarding these installations; this is so that any change in the Health & Safety regulations do not have an unwanted impact on the SED claims. The only major change involves installations like Mobile drilling units which are currently regarded as ships for periods when the unit is not directly involved in oil exploration, during periods of lay-up etc. From April 2004 an installation will always be regarded as not being a vessel until such time as there has been a permanent change of use. Therefore, all those bar room experts who have been talking about the SED claims coming to an end can be told where to get off!!

Many thanks for your enquiry. I can confirm that where you are serving on a vessel which is outside the twelve mile limit at midnight, then this is regarded as a day out of the UK for the purposes of a 100% deduction claim. The fact that the vessel may be working within the UK sector of the North Sea is irrelevant. However, it must be stressed that it is not possible to construct a 100% claim based solely on days outside the 12 mile limit, but within the UK sector. In order to be able to claim the 100% allowance, it is necessary for there to be foreign sea service in each tax year, in each claim period and in each separate employment. By 'foreign sea service' I mean the vessel must visit a foreign port or an installation in a foreign sector in the North Sea. There must be a genuine commercial reason for the visit as the tax office have in the past turned down what were obviously contrived foreign visits.

Also, it is necessary to obtain evidence of such sea service over and above the entries in a Discharge Book. This is best achieved by means of a statement, ideally signed by the Master of the vessel and stamped with the ships stamp, verifying the nights spent out with the 12 mile limit for each period of sea service. I must stress that a copy of your Discharge Book is not sufficient for this purpose as this only gives your dates of signing on and off. A clear statement verifying the dates in and out of the UK must also be obtained to support the claim. Some people try to use a copy of the vessels log, but this is not clear enough to prove days in and out. Basically, we need to prove to a civil servant , who knows nothing about seafaring, that you have spent the requisite number of days out of the UK so a clear and simple statement verified by the Master is by far the best. If you need any clarification of these points please do not hesitate to call me on 01427-753400.

I am afraid that this other tax adviser has misinformed you. It is no longer possible to claim tax relief on your expenses whilst at College. This form of tax relief was abolished on the 31st August 2000. The Government have introduced the individual learning account framework which aims to discount the cost of College courses etc. Therefore you should have seen a reduction in the cost of attendance at College to take account of this; but whether you actually spotted it is an entirely different matter!

As with most things in this life, I am afraid this one is too good to be true. You cannot use the leave days as qualifying days. What I think is happening is that people are being told that they can claim the 100% allowance on these days (which is true) but this is entirely different to actually using those days as qualifying days to keep a claim running on. As always, if you have a difference of opinion whilst on the ship about this, or any other tax subject please e-mail Steve in order to get the truth, and so settle those Bar-room arguments!

I am sorry to have to tell you but you will be liable for tax on your earnings, despite your 100% claim running through your time at College. The reason for this is that the Tax Office do not regard you as a Seafarer whilst at College. You have to bear in mind that, to be classed as a Seafarer, you have to perform the duties of your employment on board a vessel. It is the same as if you go to work in your company's offices abroad for couple of months before joining a vessel. Under those circumstances the income earned whilst in the office is taxable, and the 100% allowance cannot be claimed on this.

Hi Simon,

I can confirm that you will be considered a UK resident for tax purposes on your return to the UK. The fact that you subsequently qualify for the seafarers 100% claim (now known as SED) will not affect this; in fact the SED is only available to UK residents so there will be no question of you being regarded as non resident.

Regards
Steve King

Hi Darron,
I am afraid that the half rule is strictly applied, there are no prizes for coming second in all this!! I appreciate that there will be others who are cavalier (shall we say) in what they claim but if the Revenue find clear evidence of false claims to the 100% allowance then the penalties would be extremely severe; if only to act as a deterrent to others. Without wanting to sound like an advert this does highlight the crucial importance of obtaining professional advice sooner rather than later when looking to qualify for the 100% claim.

If you would like to discuss your dates with me please do not hesitate to give me a call.

Regards
Steve King

Hi Michele,

The first point to consider in your situation is the precise location of where you are serving on the DSV. If you are working wholly within the UK sector of the North Sea then you are liable to pay UK income tax on all your income arising from that employment. You are not regarded as a UK resident, but simply as someone who works in the UK. Depending on the tax laws in Italy, it is possible that some liability to tax exists there as well, but full account should be taken of the UK tax paid. If you perform any duties of your employment outside the UK sector then UK tax is not due on that income and a claim can be made for a refund. However, before considering making a refund, the UK tax authorities will look for some form of certificate from the Italian tax authorities verifying the fact that you are resident in Italy. Please do not hesitate to get back to me if you need any further advice.

Regards
Steve King

Hi Alex,

Just had a scout round on the HMRC website and I am afraid that the answer is not the one you were hoping for! The Revenue state that it is possible for a person to have more than one permanent work place at the same time. Whilst they accept that the majority will only have one permanent work place, factors which point to a person having a second permanent work place include:

1. The employee regularly performs a significant part of their duties there.
2. People would expect to be able to contact the employee at the second work place.
3. The employee has an office, or desk and support services at the second work place that they regularly use.

The full text of this can be found at www.hmrc.gov.uk/manuals/eimanual/EIM32140.htm. So I am afraid that it appears correct that your travelling expenses are being taxed. If I can be of any further assistance please do not hesitate to get back to me.

Regards
Steve King

Hi Tom,

I am pleased to confirm that both the Channel Islands and the Isle of Man are regarded as outside the UK for income tax purposes. You should bear in mind the need to retain plenty of evidence to support time spent in these places to support your claim. As it is possible to return to the UK, literally, within an hour I would suggest using a credit card, or obtaining similar financial receipts, at least every other day to help prove absence from the UK.

Regards
Steve King

Hi Chris,
I am afraid that there is good news and bad news in my answer! The good news is that we can count the days out of the UK, standing by a new build, in making up a claim. However, the bad news is that it is not possible to claim the 100% allowance against the earnings whilst standing by. The Revenue's attitude to this is based on the premise that whilst standing by a new build you are not "performing the duties of your employment on board a vessel".

I understand what you are saying when you mention a "holiday" but if the Revenue were to find out that you had claimed the 100% allowance illegally then the consequences would be dire to say the least! As far as the Revenue are concerned a new build does not become a vessel until the date of its first sea trials. At that point the Revenue consider that the vessel is capable of being used in navigation and so the 100% allowance can then be claimed from that date on.

Best wishes
Steve King