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HMRC internal manual

Employment Income Manual

Seafarers’ Earnings Deduction: meaning of eligible period

Section 378 ITEPA 2003

An eligible period means a period consisting of at least 365 days, which is either:

  • a period of consecutive days of absence from the United Kingdom, or
  • a combined period.

Eligible period made up entirely of days spent outside the United Kingdom

This is the simplest and easiest form of eligible period. If a seafarer leaves the United Kingdom to work abroad and at least 365 days later returns, an eligible period is achieved.

Combined period (made up of days abroad and days inside the United Kingdom)

Section 378(3) permits an eligible period to be built up by adding together days spent abroad and days spent in the United Kingdom. A combined period is a period:

  • at least half the days in which are days of absence from the United Kingdom and
  • which consists of three consecutive periods, A, B and C, where:

    • A is a period of consecutive days of absence from the United Kingdom or a period which is itself a combined period
    • B is a period of not more than 183 days and
    • C is a period of consecutive days of absence from the United Kingdom.

What is a day of absence from the United Kingdom?

A day of absence is a day at the end of which the employee is absent from the United Kingdom. The end of a day for this purpose is midnight, see Section 378(4) and the case of Hoye v Forsdyke (55TC281). In general terms, a day of departure counts as a day of absence and the day of return does not. For more details see EIM33007.

Periods of non residence in the United Kingdom

Periods when an individual is non-resident may not be included in an eligible period unless the individual was EEA resident. Seafarers should be ordinarily resident in the United Kingdom or EEA resident for the whole of the eligible period.

See EIM33005 for guidance on how to approach the problem of what is an eligible period.