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HM Revenue and Customs Brief 10/12

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HM Revenue and Customs -Tax Authorities

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Issued: 30 March 2012

Seafarers' earnings deduction: EU/EEA seafarers

HMRC Change of Practice

Seafarers who perform duties of an employment on a ship partly or wholly in UK waters during an eligible period are entitled to seafarers' earnings deduction (SED) against those earnings. See EIM33000 - Seafarers' Earnings Deduction.

Until 5 April 2011 SED was only available to seafarers who were ordinarily resident in the UK. From 6 April 2011 SED was extended to non-UK resident seafarers who were resident in a European Union or European Economic Area state and performed duties partly in UK waters on which they paid income tax in the UK. See EIM33010 - Seafarers' Earnings Deduction: claims to the deduction from non-UK resident seafarers.

The change in the law to extend entitlement to SED to EU/EEA seafarers did not include any reference to retrospective entitlement for years before 2011/12. Consequently it was HMRC's practice not to admit claims to SED from EU/EEA seafarers for earlier years.

Change of practice

HMRC now considers EU law requires that claims for SED for tax years before 2011/12, by those who were not UK resident or ordinary resident in the relevant tax year, should be allowed where the claims are made within the same time limits that apply for making such claims by those who were UK resident or ordinary resident in the relevant tax year.

Time limits

In view of the date of the making of this announcement, HMRC will extend by approximately 4 months the time limits for making claims for overpaid tax relating to claims for SED that would otherwise expire on 31 March or 5 April 2012. Accordingly, provided it is made on or before 31 July 2012, HMRC will consider retrospective claims relating to SED made -

  • in respect of the tax year 2007/08 by a person who was not UK resident or ordinary resident for that year (whether or not that person's tax affairs were, for that year, determined in accordance with Self Assessment); and
  • in respect of the tax year 2006/07 by a person who was not UK resident or ordinary resident for that year provided that person's tax affairs were, for that year, not determined in accordance with Self Assessment.

The relaxation of the time limits described above does not have effect in relation to any other claim. Claims relating to SED in respect of the tax year 2008/09 and later tax years must be made within the normal time limits for making claims in respect of such tax years (i.e. within 4 years of the end of the tax year in question).

New guidance

Further details can be found at EIM33011 onwards to explain

  • how to submit a retrospective claim to SED;
  • what evidence is required to support a claim; and
  • the years for which claims may be submitted.

About the Author

Crown Copyright 2012.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.



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Article Published/Sorted/Amended on Scopulus 2012-04-05 11:26:05 in Tax Articles

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