Seafarers
(Select any of the titles below to be taken to the relevant information).

Who are Accsett ABC?
Foreign Earnings Deductions (seatax) - how it works
IR205 - Foreign Earnings Help Sheet
Documentation and Investigation
What we do for you
Limitations
What we charge
What you do now

Who are Accsett ABC?

Pauline Kitchen is an experienced, associate member of the Chartered Institute of Management Accountants (ACMA). Sarah Kitchen is a trainee accountant - a student of the Association of Accounting Technicians (AAT). We have significant experience of the short sea sector and first hand experience of the trials and tribulations of foreign earnings deductions. Our prime objective is to provide you with an excellent service at a reasonable price.

Foreign Earnings Deductions (seatax) - how it works

If you are employed as a seafarer on board a ship and you spend 183 out of 365 nights outside British territorial waters, you may be entitled to reclaim all of the income tax you have paid on your earnings, from that employment, for the full year.

The definition of “ship” has been the subject of considerable discussion and tribunal appeals in recent years. The one certain fact that has emerged is that a jack-up rig is not a “ship” for the purpose of claiming Foreign Earnings Deductions; though “…there may be other floating structures in the offshore oil and gas industry that are capable of satisfying the tests advocated by the Court of Appeal…”. For most seafarers, this issue will be of no concern - a ship is a well known vessel! For anyone who is uncertain about whether the vessel upon which they are working may satisfy the definition of a ship, it would be sensible to seek expert advice.

It doesn't necessarily matter that you haven't worked all that time; some of your qualifying days can be made up of time spent on holiday abroad.

In order to qualify, you must comply with three basic rules:-
• Your qualifying period must start with a period outside the country.
• Your qualifying period must end with a period outside the country.
• You must not break the 'half-day rule'.

The 'half day rule' basically means that at any given point in time, you must have spent at least half a day more out of the country than you have spent in the country. If you have already reached a time of 182 days out, then you break the half-day rule, you have lost your right to reclaim any of the income tax paid for a full year. For example, let's say that your qualifying period started on 1st June 2003 and, by 29th May 2004 you had spent 182 nights out of the country. If you spend the night of 29th May ashore, you will lose your right to claim a refund of one full years' worth of income tax.

Assuming that you haven't broken the half-day rule, and that you satisfy all the requirements for a valid claim, you don't need to wait until the end of the next tax year before your claim is submitted. Using the example above, you could immediately claim a refund of tax paid during the tax year ending 5th April 2004 (1st June to 5th April - 10 months).

IR205 - Foreign Earnings Help Sheet

The Inland Revenue have developed I.R. 205 to help you to keep a proper record of your nights out of the country.

Click here to download a copy of this form and guidance notes.

Documentation and Investigation

The Inland Revenue require that you retain documentation to prove your claim for a period of 5years and 10 months following the end of the tax year to which your claim relates. Since you need the documentation for the actual tax year, that means that you must keep all documentation for a period of 6 years and 10 months; in practice, unless you are exceptionally well organised, that means 7 years! (Note;- At Accsett A B C, we are exceptionally well organised!)

If, during that period, you are selected for investigation by the Inland Revenue - for whatever reason - and you cannot produce the necessary evidence for your claim, you may be required to repay the full amount of your claim.

The Inland Revenue is not required to provide a reason for its investigation; nor is it likely to do so. It could be an error on the claim form, or an anomaly; or it may even be that your name has been selected at random using standard audit procedures. They are not being 'difficult' - they are simply doing their job! Providing your claim was demonstrably valid, it doesn't need to be a problem. However, if you cannot fully prove your claim for one tax year, it is highly likely that they will examine any claim you have made during the rest of the 6 year period.

What we do for you

We have developed a system that we believe will make the whole process painless.

We will ask you to sign an Inland Revenue form (IR64/8) to authorise us to deal with your self-assessment return on your behalf. You can still contact the Inland Revenue yourself with any queries if you want to but it means that you don't need to. If you have any queries, all you have to do is contact us and we will deal with any queries for you.

On an on-going basis, we'll check your documentation for you, and advise you if we think you need to obtain any further paperwork to support your claim. It's much easier to find the necessary information at the time of the 'event', rather than wait until you submit your claim up to a year later. More significantly, it can be very difficult to find the necessary documentation to prove where you were on a particular day six years earlier.

We'll store all the documentation for you in line with Inland Revenue requirements - so that it can be quickly and easily retrieved in the event of subsequent investigation. Of course, if you should need any of the documents yourself for any other purpose, it will be a simple matter to return it (or a certified copy) to you. This means that, provided we have all relevant documentation in store, we would be able to deal with any investigation on your behalf.

We'll keep up to date with any changes in the law, and tell you how it could affect you. If necessary, we'll amend our procedures to accommodate any new requirements.

Limitations

What we charge

Our charges are based on the service which you need, and start at £130.00 (total).

What you do now

Contact us for more details.

a) Go to the 'enquiries' page on this website. Select "foreign earnings deductions" in the drop down box at the top, then complete your contact details.
or
b) Telephone us on 01944 768162, and leave your name and address - or a telephone number where we can contact you.
or
c) e-mail us at enquiries@accsett.co.uk . Use the header "foreign earnings deductions" or "seatax", and give your name and address. Include your telephone number if you would like us to contact by phone.
alternatively
d) Pick up one of our 'flyers' from the crew or officers mess of your ship, fill in your contact details on the slip provided and post it to us.

Your details will be used only to contact you with information about our service relating to foreign earnings deductions. We will not pass your details to anyone else, and we will not contact you about any other service we offer unless we receive a specific written request from you to do so.