By Tolley

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Seafarers
  • Tax
  • National Insurance

Statutory residence test

The starting point for determining the tax treatment of a seafarer, as with any other employee, is to determine whether he is resident in the UK. For tax years 2013/14 onwards, the statutory residence test (SRT) in FA 2013, Sch 45 determines an individual’s residence for tax purposes. For more on the SRT see the Statutory residence test guidance note.

The SRT rules include various tests that depend on the amount of time the person spends working in the UK or overseas, or the number of days on which he works in the UK. The way in which those tests normally work is varied for international transport workers who have a relevant job on a vehicle, aircraft or ship.

In the context of employment as a seafarer, a relevant job is one where the duties of the employment are performed on board a ship while it is travelling and substantially all of the trips made in performing those duties are ones that involve crossing an international boundary. HMRC’s view is that if the employment is one where 80% of trips undertaken are cross-border trips, the substantially all of the trips test is satisfied (see RDR3 , para 3.26).

Where a seafarer has a relevant job and makes six or more cross border trips during the course of the tax year, neither the third automatic UK test (sufficient hours worked in the UK) nor the third automatic overseas test (sufficient hours worked overseas) apply.

If the seafarer has to consider the ‘sufficient ties test’ within the SRT, there is variation to the UK work tie for seafarers who have a relevant job (as described above). The UK work tie is satisfied if the individual works in the UK for at least 40 days during the tax year. Normally a person would be treated as

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