HMRC Rule Reference & Day-Count Mechanics.

Seafarers’ Earnings Deduction is set out in section 378 of the Income Tax (Earnings and Pensions) Act 2003. One of its conditions is an eligible period: a period of at least 365 days made up mainly of days of absence from the UK.

How HMRC defines a “day of absence”

Days are not counted by where you spend most of the day. They are counted by where you are when the day ends.

“You’re absent from the UK on a particular day if you’re outside the UK at midnight at the end of that day.”HMRC Helpsheet HS205

As a result, the day of departure counts as a day of absence and the day of return does not. HMRC’s guidance treats casting off from a UK berth as the time of departure for a voyage that begins or ends outside the UK. The guidance refers to midnight at the end of the day; it does not set out separate rules for time zones.

Being on duty is not part of the test. A rest day, leave day or standby day spent outside the UK at midnight is a day of absence in the same way as a working day.

Return visits within the period

The 365 days do not have to be spent continuously abroad. Under HS205, a return visit to the UK can form part of the eligible period when both of the following apply:

• no single return visit lasts for more than 183 consecutive days, and
• total UK days stay within the half-day rule (see Article 2).

A return visit only counts when it falls between two periods of absence. UK days at the end of a run of absence days do not extend the period.

The half-day rule limits the share of an eligible period that can be spent in the UK. HS205 states that a return visit can count towards the eligible period if:

“the total number of days you’ve spent in the UK is not more than one-half of the total number of days from your first day abroad to the last day of the period you spent abroad after that return visit”HMRC Helpsheet HS205

How the threshold is measured

• The test is cumulative. It is measured from the first day abroad at the start of the period, not visit by visit.
• It is applied again after each return visit. The count runs to the end of the period abroad that follows that visit.
• The condition is UK days ≤ ½ × total days. A result exactly equal to half still meets it.
• The 183-consecutive-day limit on any single visit applies in addition to this test.

In plain terms: each time a UK visit ends and the next spell abroad finishes, add up every day since the period began. No more than half of those days can be UK days.

SED applies to the earnings from an employment whose duties are performed wholly or partly outside the UK. For duties performed on a ship, HMRC defines “outside the UK” by reference to where the voyage begins and ends.

“The employment duties of a seafarer are regarded as being performed outside the UK if they are carried out on a vessel that’s engaged on a voyage or part voyage which begins or ends outside the UK.”HMRC Helpsheet HS205

How HMRC applies this

• A voyage, or part of a voyage, that begins or ends at a port outside the UK is treated as performed outside the UK.
• Any part of a voyage that both begins and ends in the UK is excluded.
• HMRC’s internal manual states that voyages which do not involve a call at an overseas port do not qualify. Sailing beyond UK territorial waters alone is not enough.
• For the location of duties, the UK includes its 12-mile territorial sea and the designated areas of the UK continental shelf, such as the UK sector of the North Sea. Under HMRC’s manual, days spent in those designated areas are still treated as days of absence when counting the eligible period.

HMRC’s published guidance frames this as a test of each voyage. It does not set a minimum number of foreign port visits per tax year. Keeping a record of the foreign ports called at on each voyage helps show which duties fall within this definition.

HS205 (Seafarers’ Earnings Deduction) is a Self Assessment helpsheet that HMRC publishes for each tax year. It explains the SED conditions and includes a working sheet: a structured table for summarising day counts.

What the working sheet records

• Each period abroad, as a start date and an end date.
• Each return visit to the UK in between, with the number of UK days.
• Running totals that apply the 183-day and half-day tests after each return visit.

HMRC uses this table to establish whether an eligible period of 365 days or more exists, and over which dates it runs. In HMRC’s words: “Use the working sheet if you’ve an eligible period of 365 days or more.” The resulting figures relate to the tax return for that year.

Supporting documents

“You should keep your discharge book and all other documents which support your claim. Do not send them with your tax return.”HMRC Helpsheet HS205

HMRC may ask to see these documents later. They include discharge book entries, travel tickets and boarding passes, payslips and crew agreements.

Where easySED fits

The working sheet is only as accurate as the dates entered into it. easySED keeps a running log of the underlying data as you travel: departure and return dates, days of absence, UK visits and copies of supporting evidence. It can export that log as a summary to review alongside the official HS205 working sheet with your accountant. easySED does not complete or submit HMRC forms. The digital copies it holds sit alongside your original documents and do not replace them.