EIM33003 - Seafarers’ Earnings Deduction: example of eligible period straddling tax years
Section 379 ITEPA 2003
An employee worked for a shipping company in its Southampton
offices until January 2004 when she was assigned to work on one of
the company's cruise liners operating in the Caribbean. She left
the United Kingdom on 1 January 2004 and returned to shore based
employment in Southampton on 1 January 2005.
During the year the employee:
- remained resident and ordinarily resident in the United Kingdom
- performed the duties of an employment as a seafarer outside the United Kingdom
- achieved an eligible period of at least 365 days.
In consequence all of the earnings attributable to the eligible period are covered by the deduction.
| Salary for the period | £24,000 | |
| Travelling expenses | £2,000 | |
| £26,000 | £26,000 | |
| Deduction under Sections 337 to 338 ITEPA 2003 for travelling expenses | £2,000 | |
| Amount to be covered by the Seafarers’ Earnings Deduction | £24,000 |
The eligible period straddles tax years 2003/04 and 2004/05. In general terms;
- 3 months of the eligible period falls into 2003/04 and
- 9 months falls into 2004/05.
The amount of the deduction for 2003/04 is £24,000 x 3/12 =
£6,000.
For 2004/05 it is £24,000 x 9/12 = £18,000.
See
EIM33051 for further guidance on
attribution of earnings.
