Category Archives: Law

Work Tax Free Offshore with HMRC’s Seafarers Earnings Deduction

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Income Tax Is a Thing of the Past If You Work At Sea

Within this article, we would like to let you know about an excellent piece of tax legislation that is being offered to United Kingdom citizens who work as seafarers.

This tax law came into effect as of the 1988 Finance Act and it still to this day is not very well known or spoken of. Many thousands of people will qualify for this exemption and we will give you the full details as of how to take advantage of it and whether or not it applies to you.

As of 2012, the Seafarers Earnings Deduction became a 100% tax exemption for those who happen to be employed in foreign waters around the Earth. Many people who are entitled to this excellent tax exemption do not harness it and some do not even know of it.

It is not well known and the details about it in the information provided by the HMRC is very vague and not very informative. We have dedicated this article to help you understand the Seafarers Earnings Deduction and if you can take advantage of it and get all the benefits of not paying taxes by using it.

Working on a Yacht Offers a Great Quality of Life. Image credit: Work On A Yacht

There are certain rules and regulations that must be followed firstly in order to take full advantage of this tax deduction. Not all United Kingdom citizens in the seafaring industry are able to use this tax exemption.

The current version of the Seafarers Earnings Deduction came into being during the Finance Act of 2012 because of battles fought between the HMRC and seafaring trade unions. The SED is a great method that helps United Kingdom citizens earn more money and have fewer issues with the competition and global markets related to the seafaring industries.

This law was also created to help the UK defence needs by having more UK citizens in different foreign ports and international waters. Even though this piece of tax law was created in part for the defence of the UK it cannot be harnessed by those employed by the military.

The seafaring unions continue to battle over this fact and one day the laws may change yet again to include military personnel.

While we look at the HMRC 205 Helpsheet it looks and feels like it has been written in an unintelligible language and trying to make sense of it can be difficult. The details, rules, and regulations of the HMRC do not actually explain what exactly is considered a ship.

It just states you must work on a ship to qualify for this tax exemption.

What is not actually considered a ship has been listed as the following as floating and fixed production platforms, flotels as well as mobile drilling platforms. If you are employed on one of these types of vessels this tax exemption will not apply to you.

There is a lot of misinformation about this tax break and many people do not know of it or use it. Some individuals will choose to not file their annual tax return and may face severe penalties and fines. While others may choose to set up a corporation within the UK or set up a business in other countries to pay fewer taxes.

If they understood they could apply for the Seafarers Earnings Deduction imagine the benefits they would be able to access! If you don’t file your taxes or don’t take advantage of this tax exemption you could be making a serious mistake.

Understanding the SED Rules is Vital to Income Tax Exemption

Another reason people may not file their taxes or use this tax exemption is that they do not understand how much time they are allowed to spend in the United Kingdom. With the Seafarers Earnings Deduction, you are allowed to spend 183 days ashore within the UK per given tax year.

A day in the country is considered if you were in the country at the beginning of the day until midnight of that day. You will need to keep all records and stubs that prove your time spent in the UK. If you spend longer than a 183 days per taxable year then you would not qualify for this tax exemption.

For complete clarity, anyone who has been outside the UK to work on foreign soil cannot use this exemption at all. So if someone is moving to Australia from UK to live and work, don’t think you can live out a tax free life by claiming under the SED – you can’t!

Another rule is that you must embark or disembark from foreign ports to qualify. You cannot leave port or return to port in the UK if you want this tax break.

The HMRC rules and regulations are slightly complex but the Seafarers Earnings Deduction is a great tax exemption. Be sure to file your taxes because you will need a SA302 letter if you ever want a mortgage or loan. If you can use this tax break then use it today!


The author acknowledges the following third party sources for material used including text, images and references:

How the Litigation Process of Separation Works

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The Family Law courts explained

These days, finding a couple who are happy to negotiate the separation process between themselves is a rarity. More often than not, both parties will try to withhold a sizeable portion of sensitive information that would enable discussions to reach an agreeable severance, in fear of losing too much financial security.

When this happens, both parties tend to seek assistance from the legal system and court proceedings inevitably ensue. When this happens, the assistance of the courts is sought via an application to resolve the dispute for financial remedy.

What most parties do not realise however, is under the framework of the the law, they are both required to attend a family mediation information and assessment meeting before an application to the Court is granted. This stage is purely designed for two reasons – firstly to effectively learn more about the disputes they have with each other and secondly, to try to get them to resolve their differences before it goes to court and becomes and emotionally and financially draining experience.

If however no agreement is reached, the Court is left with no choice other than to get involved and seek a legal application.

Judges Hammer. Image credit: PIxabay

Judges Hammer. Image credit: Pixabay

On receiving the application, the Court issues an automatic directive, that requires both parties to file and serve to the other party, full financial disclosure. This is done by completing what is called “Form E”, which must be submitted along with documented evidence to support any statements given.

Once processed, the court then sets a date known as the First Appointment. This initial hearing allows both parties to seek rulings from the opposite party – ensuring they supply all outstanding information associated with the dispute, and secure all valuations and important information that will help the court to reach a suitable judgement.

Once full financial disclosure has been established, the Court will then set an FDR date – a Financial Dispute Resolution appointment designed to help the judge in court at the time, assist the disputing couple to understand what the Court is most likely to order based on the evidence presented.

As with most divorce and separation cases, this tends to get people talking once more and breaks the silence in proceedings, ultimately in the hope that a suitable settlement may be reached before a full trial ensues.

If the talks fail however, the court may rule that the dispute is ongoing and they are left with no choice other than to set a future trial date in court.

Once the trial commences, both parties are given the opportunity to present their arguments and supporting evidence to the judge. It is then down to the judge in place to make a ruling based on the findings at hand and points of view presented, and outline their views on how any assets should be divided and any maintenance requirement, by either party.

Trials like this are rarely ever fought by the individuals in the case alone and are handled by a fully qualified Family Law solicitor who will take the reins and guide their client to the best possible outcome. They have a tough job because cases such as this involve a great deal of stress, emotion and pressure for their client. So at times, the Family Law practitioner has to be compassionate, understanding and highly experienced.

It’s their job to present their client’s point of view to the judge in a professional and sensible way, and use their vast experience to try to influence them into a judgement that suits their clients needs.

A lawyer with little experience is less likely to have a successful resolution and therefore, in cases where the dispute has been ongoing for a considerable length of time and involves a large amount of assets and dependents, the Family Law solicitor needs to have a strong head on their shoulders. The perfect example of an experienced Family law solicitor in such cases is Worthingtons Solicitors Kent.

A practice like this would usually insist on regular conversations with the judge to gauge their thinking and to get a better indication of how the evidence presented may be influencing their final decision when getting closer to the end of the trial date.

As with any profession, having a great relationship with the judge is critical to ensuring their clients anxieties, points of view and evidence is fully considered. Only this will enable the judge to make a balanced judgement at the case’s conclusion.