Seafarers Earnings Deduction: Yacht Crew Guide (2026)

4 Nov 2026

What is the Seafarers' Earnings Deduction?

The Seafarers' Earnings Deduction (SED) is a UK income tax relief for seafarers. If you're employed on a ship and build an "eligible period" of at least 365 days spent mainly outside the UK, you can deduct all the earnings from that period, so the UK income tax on them drops to nil (EIM33002).

It's a deduction you claim, not an exemption you get automatically. You have to count your days, keep the evidence and file a tax return. To see what's at stake on a typical wage, check our yacht crew salary guide.

This isn't tax advice; check with HMRC or a marine tax adviser.

Who qualifies for the Seafarers' Earnings Deduction on a yacht?

You qualify if you're employed as a seafarer on a vessel that counts as a ship, your duties are performed wholly or partly outside the UK, you build an eligible period of 365+ days, and you're resident in the UK, or resident for tax purposes in an EEA state other than the UK (gov.uk SED guidance; EIM33001).

A few details matter for yacht crew:

• Yachts count as ships. There's no statutory definition, so HMRC applies case law: a ship must be "capable of navigation" and "used in navigation" (EIM33101). A superyacht that cruises qualifies.
• Offshore installations don't. Platforms, FPSOs, drilling units and flotels are excluded, even when they're moving (HS205).
• The voyage must touch a foreign port. "Voyages that do not involve a call at an overseas port do not qualify" (EIM33033).
• Crown employees are out. Royal Navy sailors and civil servants on ships can't claim; Royal Fleet Auxiliary staff are the one exception (EIM33035).
• The EEA route survived Brexit. The current guidance and helpsheet still cover people resident for tax purposes in an EEA state. Non-UK residents claim on form R43M(SED) rather than a UK tax return.

Every department qualifies, deck to galley. HMRC's own examples include cooks and entertainers.

For SED, a yacht counts as a ship; an offshore oil or gas installation doesn't. Photo: kees torn, CC BY-SA 4.0.

How does the SED 365-day / 183-day rule work?

You need an eligible period of at least 365 days. Trips home don't break it as long as no single UK visit is longer than 183 days and at least half the days in the whole period are days abroad (EIM33004; EIM33005; HS205).

How days are counted: it's the midnight rule. "A day counts as a day of absence if at midnight the employee is outside the United Kingdom" (EIM33007). So the day you fly out counts as abroad and the day you land back counts as a UK day. Days off abroad count too. You don't have to be working.

You test it cumulatively. Each time you leave again, add the UK gap and the next trip to your running total. If a gap goes over 183 days, or days abroad fall below half, the chain breaks and a new count starts from your next departure.

Worked example: a UK deckhand's 18 months

After stretch 5, the period from 1 May 2025 to 30 September 2026 is 518 days, with only 63 UK days (well under half) and no gap over 183. That's an eligible period. All the pay earned in it can be deducted, including the Falmouth refit weeks, because the deduction equals the earnings attributable to the whole eligible period (EIM33002).

Stretch 6 is 226 days at home, so the chain breaks. That doesn't undo the eligible period already earned. The deckhand just starts counting again from the next departure in May 2027.

A refit in a UK yard like Falmouth still puts you in the UK, so those days count against your SED limits. Photo: Tim Green, CC BY 2.0.

How do you claim the Seafarers' Earnings Deduction?

You claim it through Self Assessment. If you're UK resident, register for Self Assessment and file a tax return with your employment income (gov.uk). Work out your eligible period on the HS205 working sheet, enter the deduction in box 11 on page Ai 2 of the Additional information pages (SA101), and list the names of the ships you worked on in box 19 on page 7 of the SA100 (HS205, updated 6 April 2026).

Don't send evidence with the return, but keep it, because HMRC can ask for it later (EIM33082):

• your discharge book (or signed sea-service records)
• payslips and your employment contract
• flight tickets, boarding passes and hotel bills
• passports and visas
• the ship's log extracts if you can get them
• your own dated log of where you were at midnight, every night

The SED NT tax code

If your yacht runs UK PAYE, you can ask HMRC for an NT (no tax) code so tax isn't taken from each payslip. According to gov.uk, you need to:

• be UK resident and in PAYE employment on a qualifying vessel
• file a Self Assessment return every year
• have a contract of at least 12 months, or six or more months' continuous work outside the UK for the same employer

You apply on form R44. HMRC won't issue the code until your first SED claim has been processed, and you must tell HMRC straight away if you stop qualifying. Many yacht crew are paid gross by offshore employers with no UK payroll. Then there's no code to change, and the return is where it all gets settled.

Missed earlier years? Gov.uk's late-claim table puts each deadline roughly four years after the tax year ends: 2018 to 2019 closed on 5 April 2023.

Passport stamps are patchy evidence, so keep your own dated log of where you slept each night. Photo: Asheiou, CC BY-SA 4.0.

Is yachting tax-free?

No. Yachting isn't automatically tax-free for UK crew. If you're UK resident, your worldwide earnings are taxable in the UK unless you claim SED or you're non-resident under the Statutory Residence Test. Being paid gross by a Cayman or Maltese company doesn't change that.

Don't assume that working abroad full time makes you non-resident. The SRT's automatic overseas test for full-time work abroad "does not apply to… workers with a job on board a vehicle, aircraft or ship" (RDR3). For most crew who keep a UK home, the Seafarers' Earnings Deduction is the realistic route.

National Insurance is a separate question. SED is an income tax relief only. Mariners' NI depends on the flag, where your employer is based and social security agreements (NIM29002). HMRC has a dedicated seafarers' National Insurance enquiries line.

What mistakes lose the Seafarers' Earnings Deduction?

• Miscounting travel days. The day you land in the UK is a UK day, not an abroad day. Over a few rotations, those miscounts can push you just under 365.
• One long stretch at home. A single UK visit over 183 days breaks the chain, however much sea time came before it.
• UK-only cruising. Duties on a voyage that never reaches a foreign port count as UK duties.
• Counting non-ship work. Earnings from a shore job or an offshore-installation contract come out of the box 11 figure.
• Years of non-residence. Periods when you weren't UK (or EEA) resident generally can't count towards an eligible period (EIM33004).
• No records, no return. If you can't show HMRC your dates, the claim is weak. If you never file, you have no claim at all.

SED FAQs

Is SED 100% of my salary?

It's 100% of the earnings attributable to the eligible period, after pension contributions and allowable expenses are taken off. Pay from outside the eligible period stays taxable.

Can I claim SED if I'm a stew or a chef, not a deckhand?

Yes. It covers employment as a seafarer on a ship, whatever the department. Compare pay in our stew, chief stew, chef, engineer, deckhand and captain salary guides.

Does my eligible period have to fit inside one tax year?

No. It can straddle tax years, and each year's return claims the qualifying pay received in that year.

Can I still claim SED after Brexit if I live in Spain or France?

Current HMRC guidance still extends SED to people resident for tax purposes in an EEA state other than the UK. Those claims are made on form R43M(SED).

Does SED reduce my National Insurance?

No. SED is an income tax deduction only. NI follows separate mariner rules.

Find the work that builds your days

The Seafarers' Earnings Deduction rewards long, steady time at sea, and that starts with getting hired. Radius doesn't offer tax services. It's a free way for crew to be found for work while abroad: check in at your port, get your ENG1, STCW and CV verified, and captains and recruiters can see you on the map. Crew can sign up free. If you're still getting started, read how to break into the superyacht industry first.