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HMRC internal manual

Employment Income Manual

Seafarers’ Earnings Deduction: Crown servants

Section 384 ITEPA 2003

The definition of employment as a seafarer in section 384(1) specifically excludes those in Crown employment. Section 384(2) defines Crown employment as meaning employment under the Crown:

  • which is of a public nature and
  • the earnings from which are payable out of the public revenue of the United Kingdom or of Northern Ireland.

In consequence, civil servants and members of the armed forces who perform duties on ships are not entitled to the deduction as they are not employed as a seafarer for the purposes of section 384.

Autumn Budget 2017 announced legislation to allow Royal Fleet Auxiliary employees to claim Seafarer’s Earnings Deduction by excluding them as being in Crown employment for the purposes of Section 384 ITEPA 2003.

The creation of government agencies and non-governmental bodies has caused some difficulty in determining whether groups of employees are Crown servants. In cases of difficulty, ask the organisation for a copy of its foundation document. This usually specifies the tax status of the organisation and its employees.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)