Seafarers Earnings Deduction (SED) is a piece of tax legislation that exempts seafarers from paying income tax on overseas earnings. The seafarer can claim 100% tax relief on the amount they earn. The law came into effect in 2012, following a fifteen-year battle between trade unions and HMRC. After a long dispute, they finally reached an agreement.
Income tax is a source of revenue for the Government to help them fund services like the NHS, education, roads, railway infrastructure, and more. However, the trade unions argue that seafarers, cruise ships, yacht crew, and all other onboard staff spend limited time in the UK and do not receive these benefits. It was also acknowledged that seafarers play a vital role in the defence needs of the UK and are in a very competitive market, so it was viewed right that they should receive a tax break.
Sadly seafarers still fail to use the SED exemption years after the ratification. Therefore many Seafarers are missing out on their earnings due to a lack of education on the matter.
Want to know more about Seafarers Earnings Deduction and how we can help you to stay tax efficient? Head over to our Seafarers page where we have a full guide with everything you will need to know or alternatively feel free to reach out to our team for a free, initial consultation.