Tax advice for yacht crews
Is working on a yacht tax free?
Like any job you will be paid a salary each month.
When you start working on a super yacht the Officer, Management Company or person in charge will ask for your bank details.
Your employer will then pay your salary into that account at the end of each month.
If you have been employed before you may be used to your employer deducting Tax, National Insurance (Social Security) and maybe pension contributions from your monthly salary.
What is left is your NET pay.
A super yacht will not take deductions from your monthly pay, they will pay you a GROSS figure into your bank account each month.
Paying tax on a yacht
It is your responsibility to pay any taxes or social security due. The tax owed depends on a number of factors including:
Residency: The country that you are a resident of is the country that you pay tax to.
Tax regulations: The rules around paying tax vary from country to country. Some countries make allowances for Seafarers (Yacht crew) due to the fact that you spend a lot of your time working at sea and small amounts of time at your country of residence.
Understand your tax position on a yacht
Understanding your own tax position is REALLY IMPORTANT. There are many crew members who do not complete a tax return, as they do not understand their responsibilities.
Do not try and hide from HMRC, if you don’t complete your tax returns then at some point they will catch up with you.
If you are British and working on a yacht then you MUST complete a tax return at the end of each year.
Tax returns are completed online and must be submitted by the end of each year.
For British residents there is a high chance that you will not pay tax on the income you receive (including tips) from the yacht. This does depend on your personal circumstances though.
Seafarers Earning Deduction (SED) scheme
For UK residents employed on board a yacht (or ship) operating outside UK waters you may qualify for the Seafarers Earning Deduction Scheme. Almost all UK residents qualify for SED and do not pay Tax or National Insurance on the income they receive from the Yacht.
Can I get help?
There is some good news!
There are tax service companies out there that offer specialist advice to Superyacht Crew. They will help you complete your tax return, for a small fee of course, but the fee they charge will out weigh the tax you will save!
A quick Google search will bring up a list. The yacht you join will all use a tax specialist and your crew mates will recommend the best. A couple we have come across are Seatax ltd or CrewFo.