Seafarers' Earnings Deduction

If you work as a merchant seafarer on ships, you may be able to claim Seafarers' Earnings Deduction to reduce your Income Tax bill. This relief can apply to your earnings from working at sea, provided you meet certain conditions about residency and time spent outside the UK. The deduction can be...

What is Seafarers' Earnings Deduction?

Seafarers' Earnings Deduction is a tax relief that allows employees who work on ships to reduce or eliminate the tax they pay on their seafaring earnings. The relief recognises that merchant seafarers spend extended periods working outside UK waters.

The deduction applies only to work on ships, not other offshore installations such as oil rigs or wind farms.

Who can claim

To qualify for Seafarers' Earnings Deduction, you must meet all of these conditions:

You worked on a ship (not just an offshore installation)
You worked outside the UK for an eligible period of at least 365 days
You were either UK resident or resident for tax purposes in a European Economic Area (EEA) State

You cannot claim if you were:

A Crown employee (such as a Royal Navy sailor)
Not resident in either the UK or an EEA State

If you hold multiple jobs, you can still claim the deduction against your seafarer pay as long as you meet all the conditions.

Royal Fleet Auxiliary employees are eligible for this deduction if they meet the qualifying conditions.

The 365-day eligible period

The key requirement is that you must have an "eligible period" of at least 365 days. This period must be mainly made up of days when you were absent from the UK.

The 365 days do not need to fall within a single tax year, and they do not need to be consecutive. What matters is that you can identify a 365-day period during which you were predominantly outside the UK while working on a ship.

HMRC provides working sheet HS205 to help you calculate whether your days outside the UK add up to an eligible period.

How much relief you can claim

If you qualify, the Seafarers' Earnings Deduction can reduce your taxable income from seafaring work. The relief applies to the earnings you received during your eligible period.

The amount of relief depends on:

How long your eligible period lasted
Your earnings from seafaring during that period
The proportion of time you spent outside the UK

Use working sheet HS205 to calculate the exact amount you can deduct from your taxable income.

How to claim the deduction

If you're UK resident

You must register for Self Assessment if you haven't already, then complete a tax return for the tax year you're claiming the deduction. Include full details of your income and use the relevant pages to claim Seafarers' Earnings Deduction.

If you're resident in an EEA State (but not the UK)

You can claim the deduction using form R43M(SED) - Repayment Claim - EEA resident merchant seafarer. This route has been available since the 2011 to 2012 tax year.

If you're not resident in the UK or an EEA State

You cannot claim Seafarers' Earnings Deduction. However, if you pay UK tax because you work for UK shipping companies, you may be able to reclaim tax using form R43M Repayment Claim.

Claiming an NT tax code

If you're a UK resident seafarer in ongoing employment, you may be able to request an NT tax code. This means your employer pays your wages without deducting any tax at source through PAYE (Pay As You Earn - the system where employers deduct tax from wages before paying you).

To qualify for an NT tax code, you must:

Be UK resident
Be employed under PAYE
Work on a ship that qualifies for Seafarers' Earnings Deduction
Complete a Self Assessment tax return each year
Have either a contract of at least 12 months, or have worked continuously with the same employer for at least 6 months outside the UK

HMRC will only issue an NT code after you've successfully claimed Seafarers' Earnings Deduction for the first time. You can make this first claim either 12 months from the start of your seafaring employment, or from the start of the previous tax year — whichever is later.

Use form R44 to request an NT tax code.

Important: If your employment ends or changes so you no longer qualify for the NT code, you must tell HMRC immediately. If it turns out you weren't entitled to the NT code, HMRC will ask you to repay any underpaid tax in one lump sum.

Time limits for claiming

You can claim Seafarers' Earnings Deduction up to four years after the end of the tax year in question. For example, for the 2021 to 2022 tax year (ending 5 April 2022), you would need to claim by 5 April 2026.

For the current 2025 to 2026 tax year, you would need to claim by 5 April 2030.

Records you must keep

HMRC may check your claim, so you must keep detailed records including:

A completed working sheet HS205
Air tickets or other travel documents
Hotel bills or receipts
Passports and visas
Your seafarer's discharge book
Freeboard logs of the ships where you worked

HMRC may also contact your employer to confirm details of your ship's voyages and crew.

Getting help

If you need assistance with your claim, you can contact HMRC's Seafarers' Helpline for specialist advice on this relief.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.