There are three qualifying steps for the Seafarers Earnings Deduction – previously called the Foreign Earnings deduction or FED

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1) 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.
2) Valid foreign port for each employment each tax year
Each employment in each tax year must include at least one voyage that begins or ends at a foreign port. A voyage that begins or ends at an oil or gas installation located outside the UK and outside the designated areas of the UK continental shelf (UKCS) can be regarded as beginning or ending at a foreign port for this purpose but must be outside the UKCS.
Incidental trips:
Any one-off trips to a foreign country’s port merely to re-fuel of change crew can now been deemed incidental to your main duties of employment and disregarded as a foreign port and can cause the claim to fail.
3) Employment must be aboard a ship
A seafarer is someone that works on a ship. There is no precise definition of a ship in tax law, but “offshore installations” are specifically not regarded as ships.The following vessels do not qualify for SED exemption:

  • Fixed Production Platforms
  • Floating Production Platforms
  • Mobile Offshore Drilling Units
  • Flotels
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