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Tax FAQ

Who can make a claim?

Anyone who has paid tax in the UK for the past 4 tax years may be entitled to a tax refund.

What do I need to claim a refund?

In the general case, all you actually need is the P60/P45 from your employer(s).

Do I need a National Insurance Number (NIN) to claim a refund?

No. Having a proper NIN usually means your claim is dealt with more efficiently, but a refund CAN be claimed using a temporary number (however, the claim is subject to delays).

What is a SEAFARER’s EARNINGS DEDUCTION (SED) claim?

You can qualify for the Seafarer’s Earnings Deduction as a seafarer if:

-you perform all your duties on a ship, or
-you perform most of your duties on a ship, and the other duties are incidental to the duties on the ship. The word ‘ship’ is not defined in tax law, but ‘offshore installations’ used in the offshore oil and gas industry are specifically identified and are not regarded as ‘ships’ for the purposes of the Foreign Earnings Deduction.

The following list of ‘offshore installations’ is given as a guide only:

-fixed production platforms
-floating production platforms
-floating storage units
-mobile offshore drilling units (both semi-submersibles and jack-ups)
flotels.

If you work on an offshore installation, you are not regarded as a ‘seafarer’ for the purposes of the Foreign Earnings Deduction and so cannot claim the Deduction.

The employment duties of a seafarer are regarded as being performed outside the UK if they are carried out on a vessel that is engaged on a voyage or part voyage which begins or ends outside the UK. For this purpose, the UK sector of the North Sea is treated as part of the UK.

If you had more than one employment in the qualifying period, you may only claim Foreign Earnings Deduction for those in which you performed duties outside the UK. A ‘qualifying period’ is made up mainly of days when you are absent from the UK. You are absent from the UK on a particular day if you are outside the UK at midnight at the end of that day. Non-work days spent outside the UK may be counted as days of absence. A return visit to the UK can also count towards the ‘qualifying period’ if:

-no single return visit lasts for more than 183 consecutive days, and
-the total number of intervening days you have spent in the UK is not more than one-half of the total number of days from your first day abroad to the last day of the period you spent abroad after that return visit.

Intervening days in the UK may only be counted if they occur between periods of absence. You cannot, for example, make a claim for a period of 365 days which consists of 183 days abroad followed by 182 days in the UK.

Holidays and time spend onboard non qualifying „ships“ can still be classed as time spent out of the UK in the build up of a claim.

What are the rules for divers?

If you are a diver working in the UK continental shelf, then you are taxed under a different set of rules, as if you were self-employed. You are able to claim expenses against your gross income as if you were self-employed. Class 1 NI is deducted and therefore this makes you exempt to paying class 4 NI.

If you are a Diver working out of the UK continental shelf, then this income is classed as employed income, and as such, would be able to claim foreign earnings deduction on this, should you have had sufficient time spent out of the UK to qualify.

What are non-resident claims?

A Non-Residency claim is one in which a Seafarer does not spend more than an average of 90 days per annum in the UK. (Please note spending less than 90 days in the UK does not guarantee a claim to Non-Residency as there are many more factors involved.)

The non-resident claim must extend over at least one complete income tax year, for example 6th April to 5th April the following year.

The above is only a broad outline, as there are further rules that apply to non-residency tax claims.

It is also very important to note that any earnings relating to duties earned whilst in the UK continental shelf may be taxable regardless depending on what sort of vessel you work on. i.e it does not depend on residency.