Shipping: Tax Allowances

Treasury written question – answered on 19th November 2020.

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Photo of Grahame Morris Grahame Morris Labour, Easington

To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential effect of the covid-19 pandemic on income tax reliefs granted under the Seafarers Earnings Deduction in tax year 2020-21.

Photo of Grahame Morris Grahame Morris Labour, Easington

To ask the Chancellor of the Exchequer, if he will bring forward measures in the Comprehensive Spending Review to ensure that merchant seafarers who no longer meet the qualifying criteria for the Seafarers Earnings Deduction as a result of the effect of the covid-19 pandemic on the shipping industry are compensated for losses in annual income; and if he will make a statement.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The Seafarers Earnings Deduction (SED) entitles seafarers to a 100% deduction from income tax for their foreign earnings in certain circumstances. The deduction is available for an eligible period of at least 365 days provided that a minimum of half of the period is spent outside the UK, and that no more than 183 consecutive days are spent in the UK during that period.

Eligible periods for SED are not bound to the tax year, and seafarers are able to add periods of work abroad to previous, or future, eligible periods. Seafarers that claim SED each year are likely to be able to add work done before COVID-19 restrictions to their previous eligible period, and so are unlikely to lose their SED entitlement.

The Government has made support available for seafarers through many other measures. It has ensured that people who need it have received help with their utility bills, had access to mortgage and consumer credit holidays and could benefit from temporary welfare measures, including an increase to the Universal Credit standard allowance and Working Tax Credit basic element.

The Government has taken recent steps to ensure that seafarers receive pay protection through the National Minimum Wage, ensuring that more than 10,000 seafarers across the UK will no longer be undercut. This builds on the Government’s work to help British maritime workers throughout the COVID-19 pandemic.

The Government keeps all taxes under review as part of its annual Budget process.

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