EIM33081 - Seafarers’ Earnings Deduction: how to claim and give the deduction

Section 378 ITEPA 2003

The procedure for making and deciding claims to relief provided by Section 42 TMA 1970 does not apply to the seafarers' deduction. Section 378(1) simply states that "a deduction is allowed...".

Self assessment taxpayers may use Helpsheet IR205 to calculate the eligible period and enter the amount of the deduction in box 1.37 on the employment pages.

New information requirement from 6 April 2006

For tax returns for then year ended 5 April 2007 onwards, employees who enter an amount for Seafarers’ Earnings Deduction (“SED”) in Box 1.37 are required to enter the names of the ships on which they performed employment duties as additional information in Box 1.40. There re references to this requirement beside Box 1.37, on page 8 of the Notes on Employment and on page 2 of Helpsheet IR205.

Consequently it will no longer be necessary to open a formal enquiry simply to establish the name of the vessel on which an employee performed duties in order to check whether earnings on that vessel qualify for SED. Fewer routine enquiries of this type from HMRC should help to reduce the costs of tax compliance for seafarers and their agents.