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HMRC internal manual

Tonnage Tax Manual

HM Revenue & Customs
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Background Material: Seafarers

Offshore installations and SED

Statutory exclusion of offshore installationsMobile drilling rigs including semisubmersibles, 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 2003-04 and EIM33103 for guidance for later years. See EIM33104 for examples

The following are not accepted as ‘ships’, for SED purposes, wherever in the world they may be located:

Fixed production platforms

  • fixed production platforms,
  • floating production storage and offloading vessels (FPSOS),
  • floating storage units,
  • mobile off-shore drilling units including drill ships, semi submersible and jack-up rigs, and
  • flotels (floating accommodation units).Following the decision in Torr and Others v CIR (

EIM33106) published in January 2008, HMRC has reviewed the position with regard to the classification of some other vessels as offshore installations

Other vesselsBefore the Torr decision, HMRC regarded some types of vessel as ships for the purpose of SED because it understood these vessels always performed their duties in a transient manner (see

EIM33108). The following are examples of the vessels concerned:
* diving support vessels * heavy lifting and construction vessels * well service vessels. * But the Torr decision required HMRC to change that view in some circumstances.For further details see



Definition of ‘offshore installation’ TTM11130, EIM33102, EIM33103, EIM33104
Seafarers earnings deduction (SED) TTM15350, EIM33000, EIM33001
Conditions of SED TTM15370, EIM33001 et seq
Guidance for seafarers and employers TTM15300