Superyacht work is really exciting – however, it can seem daunting when it comes to tax!
Indeed, there are several questions you may have about seafarer’s tax as a yacht crew member; “Is working on a yacht tax free?” “How do I go about paying tax if I work on a yacht?” and “Is there any help I can get on my tax return as a seafarer?” for example!
Our experts at Flying Fish have shared the answers to these questions and more, as well as top seafarer’s tax advice and details of our own tax return service in this helpful blog!
Your questions about tax when working on a Superyacht answered:
1. Is working on a yacht tax free?
Like any job, as a yacht crew member, 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 potentially 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.
2. How does paying tax on a yacht work?
It is your responsibility to pay any taxes or social security due. The tax owed depends on several factors, including the following:
- 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 will make allowances for you as a seafarer because you spend a lot of your time working at sea and small amounts of time at your country of residence.
3. Why do I need to complete a tax return?
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 work 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.
4. What is the Seafarer’s 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 (SED). Almost all UK residents qualify for SED and do not pay Tax or National Insurance on the income they receive from the Yacht.
5. Can I get help with my seafarer’s tax return?
Here’s the good news!
There are tax service companies out there that offer specialist seafarer’s tax advice to Superyacht crew. They will help you complete your tax return – for a small fee, of course – but the fee they charge will be a drop in the ocean compared to the tax you’ll save.
Flying Fish run a seafarers tax service for all UK crew.
For just £210 per year, we’ll complete your tax return for you and make sure it is done correctly so you pay no income tax. In short, this will save you so much money, time and stress!