Seafarers’ Earnings Deduction: a plain guide
If you work at sea and spend most of the year outside the UK, you may not have to pay UK income tax on your seafaring earnings. This guide explains how the Seafarers’ Earnings Deduction (SED) works and what you need to claim it.
What SED is
SED is a deduction from your taxable income. If you qualify, it covers all your earnings from your seafaring job for the eligible period, so there’s no UK income tax to pay on those earnings. It doesn’t affect National Insurance.
Who can claim
You may be able to claim if all of these apply:
- you’re employed to work on a ship, as crew or in another role on board, such as hospitality
- your duties are performed wholly or partly outside the UK
- you meet the residence rules (our eligibility check asks about this)
- you meet the day-counting rules over an eligible period
You can’t claim if you’re employed by the Crown, for example in the Royal Navy or Royal Fleet Auxiliary.
What counts as a ship
Most seagoing vessels count, including cargo ships, tankers, cruise ships, ferries, yachts and offshore supply or support vessels. Offshore installations, such as oil and gas platforms and rigs, don’t count. If you split your time between vessels and installations, only the vessel days can go towards your claim.
The day-counting rules
SED is worked out over an eligible period. This isn’t the same as the tax year, and it can run across several tax years.
| Rule | What it means |
|---|---|
| At least 365 days | The eligible period must be 365 days or longer, and must begin and end with a day spent outside the UK. |
| No more than 183 days in a row in the UK | Within the period, you can’t spend more than 183 consecutive days in the UK. |
| No more than half the days in the UK | Across the whole period, the days you spend in the UK can’t be more than half of the total. |
A day counts as a day outside the UK if you’re not in the UK at midnight. That’s why flight times and port calls can make a real difference to the count.
How to claim
SED is claimed through a Self Assessment tax return. It isn’t applied automatically through your wages, so if UK tax is taken from your pay, a successful claim can mean a refund. For the tax year ending 5 April, the online return is normally due by 31 January the following year.
HMRC’s time limits usually let you claim for earlier years too, generally going back up to four years.
Records to keep
- your discharge book or seaman’s book
- employment contracts
- payslips and P60s
- travel records showing when you left and returned to the UK, such as flight tickets and passport stamps
- a simple log of where you were at midnight each day
HMRC can ask you to show how you worked out your days, so keep these for at least a few years after you claim.
Get your claim checked
Our free eligibility check takes about five minutes. We’ll tell you whether you’re likely to qualify and what we need from you. If you go ahead, your tax return with SED claim costs £99 and is ready within 72 hours of receiving your paperwork.
This guide is general information, not advice for your situation. HMRC’s own guidance is in helpsheet HS205, Seafarers’ Earnings Deduction.