Working on Cruise Ships - Income Tax (UK)
When a person receives an income above the provided personal allowance, and is a resident of the UK or is based in the country for tax purposes, he or she is required to pay tax regardless of whether a part of that work is carried out abroad or overseas, such as the case of cruise ship employees.
This means that even when you are working at sea, all your incomes will still be taxed by the HMRC. These include your earnings from employment/self-employment, pension income (state, company and personal), interest on savings, income from shares, rental income, and trust income. Yes, there will be no escaping the taxman, but here's the good news-you are entitled to a tax refund if you think you have overpaid through your job.
What Are The Possible Instances Where You Have Overpaid Your Tax?
- You are new in the job and used an emergency tax code for a while.
- Your employer used the wrong tax code.
- You were employed for only a part of the year.
- The other income (ex. savings and investment) you have that is taxed through your current tax code has reduced.
- Your employment status has changed from full- or part-time to self-employed.
- You lost your job through redundancy.
It is important to note that your tax code determines your tax-free allowances and the amount of tax to be deducted from your gross income.
How To Reclaim Overpayments?
The first step is to write or call the HMRC to inform them that you think you paid too much and why. They may already have all the information they to recheck your claim and, if not, they may inform you what data or documents they need.
You can be certain to get back the tax you have overpaid as long as you have made the claim on time. Thus, you must be familiar with the time limits for claiming a refund through the PAYE.
Claiming Refund For Seafarer's Earnings Deduction
Aside from overpaid tax refund, as a cruise ship employee, you may also be able to reduce your tax bill through the Seafarers' Earnings Deduction. This tax relief can be claimed by UK residents working on ships, provided that the following criteria are met:
- Work on aship, e.g. tankers, cargo vessels, passenger vessels and cruise liners. Off shore installations such as oil rigs are not included.
- Completed at least 365 days of employment as a seafarer, which begins and ends with a period abroad, and must not spent 183 continuous days in the UK.
- Must complete at least one voyage in a year that begins or ends in a foreign port.
How To Get The SED?
To get a refund through the SED, you must complete a Self Assessment tax return. Click here for the guide. After which, you can either get in touch with the HMRC to get a refund or just leave the overpayment in your Self Assessment account to be counted against your future tax bills.
If you need help, you may apply for the refund online here at Taxback and allow us to take care of all the hassle for you.