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Taxpayers 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).
The deduction was available only to seafarers ordinarily resident in the UK until 5 April 2011, when it was extended to non-UK resident seafarers who were resident in a European Union (EU) or European Economic Area (EEA) state and performed duties partly in UK waters on which income tax was paid in the UK.
Initially, there was no retrospective entitlement for years before 2011/12.
HMRC now consider that EU law requires that SED claims for tax years before 2011/12 should be allowed where they are made within the same time limits that apply for making such claims by those resident or ordinarily resident in the UK.
The department will extend by approximately four months the time limits for making claims that would otherwise expire on 31 March or 5 April 2012.
Provided they are made on or before 31 July 2012, the Revenue will consider retrospective claims made by a person who was not UK resident or ordinarily resident:
- for 2007/08 whether or not that person’s tax affairs were, for that year, determined in accordance with self assessment; and
- for 2006/07 provided that person’s tax affairs were, for that year, not determined in accordance with self assessment.
Claims relating to SED in respect of 2008/09 and later tax years must be made within the normal time limits for making claims in respect of such tax years: four years of the end of the relevant year.
