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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Seafarers' Earnings Deduction: meaning of duties performed wholly or partly outside the United Kingdom

Sections 378 and 383 ITEPA 2003

The condition at Section 378(1)(b) specifies:

“the duties of the employment (as a seafarer) are performed wholly or partly outside the United Kingdom …”

However the legislation is silent as to the amount of duties that will satisfy the condition. There is no de minimis limit prescribed.

There are special rules for deciding whether the duties of a seafarer’s employment have been performed wholly or partly outside the United Kingdom for the purposes of the deduction.

Section 383(4)(a) ensures that incidental duties performed in the United Kingdom are not treated as performed outside the United Kingdom for the purposes of the seafarers’ deduction. Whether duties have been performed in the United Kingdom is therefore a question of fact.

Section 383(1) treats duties performed by a seafarer outside the United Kingdom as performed in the United Kingdom where:

  • in the tax year in which the duties are performed, the employment is in substance one whose duties fall to be performed in the United Kingdom and
  • the performance of duties outside the United Kingdom is merely incidental to the performance of duties in the United Kingdom.

If substantive duties of the employment are carried out abroad in a tax year, then the condition in Section 378(1)(b) will be satisfied. The idea underlying substantive or merely incidental duties is based on the quality not the quantity of duties (see EIM40203).

Example

An engineer who normally works on ships engaged on voyages between United Kingdom ports is required to carry out the same duties on a ship engaged on a voyage between Rotterdam and Norway. The voyage lasts for one week so in that year the duties of her employment as a seafarer are performed partly outside the United Kingdom. However, the deduction will not be due unless she also has an eligible period of at least 365 days. In the circumstances of the example this is unlikely.