Seafarers’ Earnings Deduction (SED)
How UK Seafarers Can Reduce Their Tax Bill
💼 Seafarers’ Earnings Deduction (SED): How UK Seafarers Can Reduce Their Tax Bill
Reduce Your Tax Bill with the Seafarers’ Earnings Deduction (SED)
Barnett & Co Accountants – Specialist Tax Advice for Seafarers
If you are an employee working at sea, you may be eligible for a valuable tax relief called the Seafarers’ Earnings Deduction (SED). This deduction could allow you to claim back 100% of the UK income tax on your seafarer earnings—helping you significantly reduce your tax bill.
In this blog, we explain who qualifies, what records you need to keep, and how to make your claim.
✅ Who Can Claim the Seafarers’ Earnings Deduction?
To qualify for SED, you must meet all of the following conditions:
You worked on a ship (not an offshore installation like an oil rig).
You worked outside the UK for a sufficient length of time—typically at least 365 days.
You were either:
Resident in the UK, or
Resident for tax purposes in an EEA State (other than the UK).
You can still claim SED even if you had more than one job during the tax year—provided each employment meets the above criteria.
❌ Who Cannot Claim the Deduction?
You will not be eligible for SED if you:
Were a Crown employee (e.g. a Royal Navy sailor) — unless employed by the Royal Fleet Auxiliary, who are eligible.
Were not a UK resident.
Were not an EEA resident.
📚 Records You Must Keep
HMRC may request evidence to support your claim, so it is vital to retain documentation such as:
Completed working sheet HS205
Air tickets, ferry passes, or other travel vouchers
Hotel bills and expense receipts
Passports and visas
Your Seafarer’s discharge book
Freeboard logs of vessels you worked on
HMRC may also contact your employer to verify the details of your ship’s voyages and crew.
🧾 How to Claim the Seafarers’ Earnings Deduction
You must have an eligible period of at least 365 days, mostly consisting of days when you were absent from the UK at midnight. You can use HMRC’s working sheet HS205 to calculate whether your time outside the UK qualifies.
If you are a UK resident:
You must register for Self Assessment and submit a tax return, including the relevant pages for employment income and the deduction.
If you are an EEA resident (excluding the UK):
You must submit form R43M(SED) to claim a repayment of tax deducted under PAYE.
💡 Claiming an NT Tax Code (No Tax Deducted at Source)
If eligible, you may be able to ask HMRC to issue your employer with an NT tax code, meaning no tax will be deducted from your wages through PAYE.
To qualify for an NT code, you must:
Be UK tax resident
Be in a PAYE employment
Work on a qualifying ship
File a Self Assessment tax return each year
Have a contract of 12 months or more, or have been in continuous seafaring employment for 6 months+
🔔 If your employment ends or your circumstances change, you must inform HMRC immediately. If you were later found not to be eligible, HMRC can request repayment of the tax in one lump sum.
NT codes are typically issued after HMRC has processed your first successful SED claim. You can use form R44 to request the NT code.
⏳ Time Limits for Claiming Seafarers’ Earnings Deduction
You must claim the Seafarers’ Earnings Deduction within four tax years of the end of the tax year to which the claim relates. Here are some examples of key deadlines:
For the 2013–14 tax year (ended 5 April 2014), the claim deadline was 5 April 2018
For the 2014–15 tax year, the deadline was 5 April 2019
For the 2015–16 tax year, the deadline was 5 April 2020
For the 2016–17 tax year, the deadline was 5 April 2021
For the 2017–18 tax year, the deadline was 5 April 2022
For the 2018–19 tax year, the deadline was 5 April 2023
If you miss the deadline, HMRC will usually reject the claim unless you can show exceptional circumstances. Always aim to file your claim as early as possible.
⚠️ If You Are Not a UK or EEA Resident
If you do not reside in the UK or EEA, you cannot claim the Seafarers’ Earnings Deduction. However, you may still be able to reclaim UK tax by submitting form R43M if you worked for a UK-based shipping company.
🧭 Need Help Claiming the Deduction?
At Barnett & Co Accountants, we specialise in helping seafarers navigate their tax affairs, from Self Assessment registration to SED claims and NT code applications. If you work at sea and want to know how to maximise your tax savings, speak to our team today.
Contact us today
📞 0345 646 1516
📧 info@barnettandco.uk
📍 Electra House, Electra Way, Crewe, CW1 6GL
💬 WhatsApp: 07867770009
