HM Revenue and Customs Brief 10/12
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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
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
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).
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.
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© Crown Copyright 2012.
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Article Published/Sorted/Amended on Scopulus 2012-04-05 11:26:05 in Tax Articles