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SEAFARERS EARNINGS DEDUCTION - SAMPLE COMPUTATION

The following shows an example of how the computation works, but please contact Nicolson Accountancy for a discussion of your personal circumstances.

Mary is an Engineer on board a Merchant Navy vessel and has no other income.

She flies out at 11pm on 5 January 2009 to join her vessel in Ascension, before spending 4 months in the Antarctic.

Two months at home and then back to the Antarctic for another four months.

After a month at home, she heads off to see relatives for a month in Australia.

Thereafter, it is two months in the Gulf, servicing warships.

Due to a family wedding in the Summer of 2010, Mary has to miss her next trip and is ashore for almost 7 months.

Back off to the Gulf in October 2010, Mary cracks a coupe of ribs on the ship and is flown back to hospital in the UK.

In January 2011, she is back to the Antarctic for six months.

Date out	Date in	Days out	Days in	Total days	1/2 total	Cum days in UK	Pass test?	Comments
05/01/2009
	10/05/2009	125		125				Antarctic
10/07/2009			61	186	93	61	Yes
	16/11/2009	129		315				Antarctic
08/12/2009			22	337	168	83	Yes
	05/01/2010	28		365				Holiday
10/01/2010			5	370	185	88	Yes
	06/03/2010	55		425				Gulf
02/10/2010			210	635	317	298	Yes
	27/10/2010	25		660				Gulf - hospital
30/01/2011			95	755	377	393	No
	31/07/2011	182		182				Antarctic

When Mary comes to prepare her 2008/09 Tax Return she doesn't know if she has a qualifying period until a period of 365 days has elapsed.

The 2008/09 Tax Return is due in on 31/1/10, but her qualifying period doesn't finish until 5/1/10. That doesn't give much time to prepare and lodge her Tax Return.

On 5/10/10 Mary has a qualifying period, and as she has passed the test (Are the cumulative days in the UK less than half the total days?) on every occasion, then Mary can claim SED for all her income during the period 5/1/09 to 5/4/09 on her 2008/09 Tax Return.

All her income in 2009/10 qualifies for SED as she has a qualifying period of 365 days and passes every test.

As her accident means she does not have enough days to pass the test, only her income from 6/4/10 to 30/1/11 qualifies for SED on her 2010/11 Tax Return.

The entire calculation will start again on her next trip out of the UK, and Mary cannot have a new qualifying period until 30/1/12.

Where only part of the year qualifies, then the income from that source is normally apportioned simply by the number of days. However, there are other basis which can be more advantageous, and you should speak to us about this.

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