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HMRC internal manual

Employment Income Manual

Seafarers’ Earnings Deduction: meaning of employment as a seafarer

Sections 384 and 385 ITEPA 2003

Meaning of seafarer

Section 384 defines employment as a seafarer as an employment other than Crown employment consisting of the performance of duties on a ship or of such duties and others incidental to them.

Employees who are seafarers for this purpose will therefore include not only sailors but also anyone whose work is carried out on ships, such as cooks, entertainers and couriers on luxury liners. It does not matter if some of the duties are not performed on board ship so long as they are incidental to those that are.

Meaning of ship

There is no statutory definition of the word ‘ship’. The Court of Appeal decided in the case of Perks v Clark and others (74TC187) that for the purposes of the deduction a ship must be:

  • capable of navigation and
  • used in navigation.

Navigation means ordered movement across the water. To be a ship, a vessel does not need to have a rudder or its own motive power.

Structures that do not normally move about are not generally regarded as ships as they are not used in navigation. These include fixed production platforms, accommodation barges, light and weather ships, etc.

Statutory exclusion of offshore installations

Mobile drilling rigs including semi-submersibles, jack-ups and similar vessels in the oil and gas industry may be capable of being used in navigation (and may actually be so used). However, section 385 excludes offshore installations from being ships for the purposes of the deduction. In consequence, workers on offshore installations, no matter what their duties are, are not seafarers and are not entitled to the deduction.

See EIM33102 for guidance on offshore installations for the tax year 2003 to 2004 and EIM33103 for guidance for later years. See EIM33104 for examples.

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