HMRC internal manual

Employment Income Manual

EIM33053 - Seafarers’ Earnings Deduction: attribution of earnings: effect of other deductions

Section 381 ITEPA 2003

The deduction is available only against the net earnings attributable to the eligible period.

The net earnings are amounts remaining after deductions for:

  • pension contributions
  • allowable expenses and
  • capital allowances.

The rule mainly affects cases where the eligible period covers only part of the tax year.


A seafarer has an eligible period ending on 5 November 2008. For the tax year 2008 to 2009, he has earnings of £24,000 and pays pension contributions of £2,400. His net earnings are £21,600.

The earnings attributable to the eligible period from 6 April 2008 to 5 November 2008 are £12,600 (7/12 × £21,600).

Liability for the tax year 2008 to 2009 is calculated as follows.

Earnings   £24,000
Pension £2,400  
Seafarers’ deduction £12,600  
  £15,000 £15,000
Net taxable earnings   £9,000

Without this rule, a person could effectively get relief for a full year’s expenses, etc. against a part-year’s earnings. So, in the example above, there would have been a seafarers’ deduction of £14,000 (7/12 × £24,000) plus pension contributions of £2,400 leaving only £7,600 taxable.