H M Revenue & Customs TAX Ruling

[Andy Shiers]

The muppets in power also canna see what a great way to create animosity amongst the ships crew with this !
I think there is a group of deranged "Think-tank" accountants in the government who are given the directive to cause havoc in the Industries 😯 Despondance and anarchy !
Way to go dudes 😕
Drive the back-bone of the British Tax payer out of the country ,
Bring in more Immigrants to replace them and pay them to stay 8)
Fantastic thinking 😕

[Savante]

I think they may have overdosed on froot-shoot !! 😆

Bloddy robinsons !

[Moray]

http://hmrcisshite.blogspot.com/

http://web.mac.com/nickmorgan/HMRC/tax-hell.co.uk.html

Given the foregoing, it makes you wonder if the individuals concerned with the latest attack on SED were part of the recently announced redundancies ?

If yes, a small step in the right direction, if no why not ?

[James McLauchlan]

The latest circular from HMRC on the matter of SED:

Seafarer’s Earnings Deduction: Pride South America

Seafarers may be entitled to a 100% relief from income tax on their earnings under Seafarer’s Earnings Deduction (SED). A seafarer is eligible for SED if they perform duties of their employment wholly or partly abroad on a ship, provided they are absent from the United Kingdom for an "eligible period" of at least 365 days or a combined period made up of days abroad and days inside the United Kingdom.

The Special Commissioners, an independent body who determine tax appeals, considered appeals by five individuals who had been employed on the Pride South America and had claimed SED. The Special Commissioner decided that the Pride South America was not a ship for the purposes of SED and the five appellants were therefore not entitled to SED (Torr and Others v CIR (SpC679)).

The Special Commissioner’s decision will affect some of the types of vessel which are ships for the purposes of SED. HMRC is aware of the uncertainty that this decision has caused. However, given the technical nature of the ruling HMRC want to work with representatives’ bodies including Nautilus and the National Uni0n of Rail Maritime & Transport Workers before issuing revised guidance. HM Revenue and Custom’s revised guidance will reflect discussions with stakeholders about the interpretation of the Pride South America decision to ensure that it is implemented in a clear and practical manner. HMRC will publish revised guidance in February 2009.

SED is a deduction from earnings from employment as a seafarer. SED has never been available for people working on “offshore installations” rather than ships. It was this issue that was subject to review by the Special Commissioners. Broadly, the legislation provides that there are two conditions both of which must be met for a vessel to be an “offshore installation”. The first condition requires the vessel to be involved in a “relevant use”, for which there are six alternative definitions. The definition of relevant use that applies most often, and which applied in the Pride South America case, relates to a vessel involved in the exploitation of mineral resources. The second condition, is that the vessel is standing or stationed 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.

The filing return dates for 2007/08 tax returns are 31 October 2008 for paper returns and 31 January 2009 for online returns. HMRC expects that most people who claim SED will have already submitted their 2007/08 returns. However, some people may not have submitted their 2007/08 return. HMRC appreciates that they may wonder whether they must submit their 2007-08 tax returns before we publish our revised guidance. All tax 2007-08 returns must be filed within the relevant deadlines which fall before the relevant guidance is due to be published in February 2009.

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.

HMRC recognises that this may disappoint some individuals, however we believe that it is important to get the revised guidance right.

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:

• .The legislation for SED is in sections 378 to 385 of the Income Tax (Earnings And Pensions) Act 2003

(http://www.opsi.gov.uk/acts/acts2003/ukpga_20030001_en_1).
• The definition of “offshore installation” is in section 1001 of the Income Tax Act 2007

• (http://www.opsi.gov.uk/acts/acts2007/ukpga_20070003_en_1).

• The Special Commissioner’s decision in the Pride South America case is available on the Finance and Tax Tribunals’ website http://www.financeandtaxtribunals.gov.uk/Aspx/view.aspx?id=3869).

[Pugwash]

Most commentators would agree that the British seafarer has been decimated by foreign cheap crews over the past 20 years. Companies with an eye on their balance sheets love the low pay that they can get away with and frankly don’t really care about the quality of their crews as long as they can retain a few British personnell to keep the foreiners in order. So generally speaking the SED has encoraged British shipping companies to be able to pay British seafarers low wages knowing that the balance will be made up by the taxman. Other personnel (non traditional seafarers; no offense guys/girls) like ROV, Survey, Project Engineers etc that work on the same ships are not so threatened by the cheap foreign crews like the seafarers are, but I suspect that their companies are still enjoying the opportunity to pay below par knowing that their employees are making up the shortfall from SED.
So with this in mind, if HMRC decide to exclude the non traditional seafarer from SED, would personell be prepared to demand that their employer now take on their responsibility to pay them the full wages that their skill and dedication deserve without expecting the taxman to contribute? If not, would it be time to join with the divers in putting big pressure on them to do so?

[Moray]

I consider myself as a seafarer, I earn my living exclusively from a seaborne employment. I have a UK discharge book on this basis.

The only reason I remain offshore after 22 years is because of SED, the moment it is stopped I will be heading onshore.

[thinsub]

Lets face it with the plummiting pound the UK seafarer has lost a fortune in spending power in world terms we are now the cheap labour in the oil game and if we lose our SED and start getting less days with the current economic slowdown, we won’t be able to afford nothing. Imports are going to get more expensive, going you hols more expensive its all doom.

I think I am at least $200 cheaper a day than someone getting paid in dollars now and might be getting humped with a big tax bill as well. May as well jack it all in and become a posty, at least I will get home every day.

Thinners

[luckyjim37]

[Other personnel (non traditional seafarers; no offense guys/girls) like ROV, Survey, Project Engineers etc that work on the same ships are not so threatened by the cheap foreign crews like the seafarers are,]

That is not true at all. Over the past two years I have noticed a increase in Brazillian and South African workers who are on lower rates that the British ROV guys. There has also been a slow but steady rise in the amount of Polish and other nationalities in the Survey departments as well as Croatian project engineers.

Good luck to all of these guys but they are cheaper to employ and in quite a few cases harder working than many Brits offshore.

The fact is every year for as long as I have been offshore there have been the SED coming to an end rumours. Now it would appear that the HMRC is yet again closing some of the loops on claimants.

If you do not want to pay tax go abroad that is the simple way around it. This for me and many others is not practicable however since I have children in school I do not mind paying some tax as I use the system. At least the HMRC is talking to the industry before submitting its final positon on this matter.

The thing that a lot of the older and bolder guys forget is that if we start asking employers for even more money they will just find someone cheaper than we are and there is always someone who will work for less.
Trainees, Brazillians Eskimo’s they do not care where the staff come from as long as the work gets done.

[Pugwash]

(Trainees, Brazillians Eskimo’s they do not care where the staff come from as long as the work gets done.)

Well I’m sorry to hear that Jim.
I wonder if those Cod-heads at HMRC have every thought that if they drive away the British workers in the offshore game with their sniping at our SED, the replacement foreiners won’t be paying them any tax regardless of who gets SED or not ❗

[Ray Shields]

So with this in mind, if HMRC decide to exclude the non traditional seafarer from SED, would personell be prepared to demand that their employer now take on their responsibility to pay them the full wages that their skill and dedication deserve without expecting the taxman to contribute?

Course they won’t. Most people in the office for a start think "why should they get their tax back when I don’t". Also, as long as they have people who work for the wages they offer – why should they offer anymore?

I would be interested to know how many ROV Companies do actually cosider that personnel get tax back and therefore reduce wages accordingly. Certainly not at Fugro (Aberdeen).

Everyone is paid the same, the majority are working on rigs and have never got their tax back, the others who work on our ships some of them (especially the Carla this year as they’ve been in India) CAN get their tax back. But their wages are the same as everyone elses.

[thinsub]

People are paid the same in most companies whether on rigs or vessels but from my experience you are worked overall a lot harder on vessels than you would on a rig.

therefore SED made all the difference for having to work a lot more on vessels. I for one, if we lose out on SED will be looking to move off construction vessels to something else whether that is a rig for the same money or a job ashore.

Working my nuts off in construction and not getting my tax back or working on a rig for the same money with an eyeball wins every time.

Being a postie gets more appealing every day though.

[luckyjim37]

The problem is though Pugwash is that if the guys who claim SED are not paying tax either why should the HMRC care. If like Thinsub a lot of guys say ram this paying tax on vessels and take rig and onshore jobs then the HMRC is actually quids in because he will be taking tax off you for sure.

HMRC does not lose out in this situation. Obviously this whole thing is designed to now raise more money for the economy which seems to be in a little bit of a decline at the moment. Personally I do not bother with SED as I have expressed in the past I benefit from the system with kids in some of the best schools in the country (according to offsted:)) but we do still get a better wage:work ratio than just about everyone I know who lives near me.

The biggest problem with this issue is to many people are now dependant on the tax rebate which is unfortunate for them but we would have been naive if we thought it would last forever.

As I understand it to be employed as crew on a vessel you have to have and STCW95 safety certificate. Not many of us have. During an emergency situation we do not really input anything unless it has gone seriously pete tong. I even noticed on some vessels a lot of project staff cannot be bothered to assist with loading food stores which they need to eat.

There are a lot of issues which we as an industry need to address before we can put ourselves back firmly into the catagory of marine staff who are entitled to SED.

The other major point is we do get paid a lot more than the marine crew who this whole system was set up to help so I can understand why they are a little offhand with us when negotiating a deal for themselves (I do not agree with it but I understand it)

[mind-when-this-was-fields]

Well during a long stretch of bad weather in Norway we were required to do a full fire drill with a medivac scenario.
This had to involve ALL crew members and everyone had to get fire hoses rigged up, carry stretchers up to the helideck. The works.
I have also seen riggers tieing the boat up as the ABs were in their beds!!
When does a person from project, rov etc suddenly become part of the crew?? When the boats on fire or there is an emergency situation??
And yes I have given the marine crew a hand with loading food onto the boat…………..Well a man has to eat:-)))))

[Andy Shiers]

How about zipping around platform legs to tie up the vessel ( three point mooring ) Or transferring to the platform to take the mooring lines off !
That’s AB’s work as well 😯
If this happens ( And there are alot of Ships crew shouting Hear Hear ! )
Then I will be the first to only do Two week stints and no more plus the AB’s can do ALL of the sodding deck work / Labour with stores and painting 👿
I will just concentrate on my ROV instead 😈
Pay peanuts , get monkies 😈

[bt]

luckyjim
What you are stating is what the ship crews get paid for, as you get paid to do your job whatever it may be. Also i can`t see how hmrc can give tax rebate to one person on the grounds that he works at sea and not give the man next to him.
If they do all they have to say is that you have to be a member of the merchant navy to recieve SED.
You also have to look at the not so well paid jobs in the offshore industry which work on vessels.
Who are you comparing the first and second mate with to be exact. As i would believe they would on more per day than pilots. If you are tacking it over a year most project crew will do more days at sea than the merchant seaman. You`ll know this if you work on a ship as soon as thier 28 days are done they are crying, mind you even before it`s done at times. As they say though thats what thier contracts states.
If it only takes to do a StCW95 cert. i`m sure most people wouldf do it.
Roll on FEB

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