Wednesday, 30 September 2009

Seafarers' Earnings Deductions

From September 2009, new rules have come into force, as a result of Tribunal decisions, which extend the range of duties which can qualify for SED. Following the decision in Pride of South America, any duties considered to form part of "exploiting mineral resources by means of a well" were considered to be part of an offshore installation and hence SED was not available. A recent case, Spowage, has modified that decision with effect from 2008/09 onwards to allow SED where the "exploiting" of "mineral resources" occurs at a distance from the well, and in such a way as to clearly not form part of the well operation. This means that diving support vessels, pipeline inspection services and similar trades will qualify for SED where they occur away from the wellhead. Clearly activities on or adjacent to the wellhead are unlikely to qualify. Further clarification is available on the Inland Revenue website, or by contacting Angus.

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posted by Angus at 21:46 Links to this post

Friday, 7 November 2008

Seafarers Earnings Deduction

The following letter was received from the Inland Revenue this week: Following representations, I want to clarify what we are doing in revising our guidance and the treatment of claims. SED has never been available for people working on 'offshore installations' rather than ships. Broadly, the legislation provides that there are two tests both of which must be met for a vessel to be an 'offshore installation'. A vessel must be involved in the exploration or exploitation of mineral resources and standing or stationary whilst doing so. Construction, construction support, well service and dive support vessels that do not meet either of these tests will continue to be ships for the purposes of SED. HMRC's revised guidance will reflect discussion with stakeholders about the interpretation of the Pride South America decision to ensure that it is implement in a clear and practical manner. HMRC will publish revised guidance in February 2008. HMRC appreciates that some people may wonder whether they must submit their 2007-08 tax returns before we publish our revised guidance. All 2007-08 tax returns must be filed within the relevant deadlines. Anyone who decides that they want to see HMRC's revised guidance before deciding whether they are entitled to claim SED can submit their return without a claim to SED. They can then amend their 2007-08 tax return in the usual way to include a claim to SED. People have 12 months from 31 January after the end of the tax year to correct their tax return. For the 2007-08 return, people have until 31 January 2010 to make an amendment. If someone wishes to consider making a claim to SED for 2007-08 before the guidance is revised they can refer to the legislation on which HMRC's guidance for SED is based. It is publicly available as follows:

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posted by Angus at 10:29 Links to this post