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Working on board a ship, conditions for claiming seafarers' earnings deduction

Individuals who are employed on a ‘ship’ may claim a 100% deduction from UK earnings for income tax, where duties are performed wholly or partly outside the UK, during an eligible period.

The deduction is usually referred to as the seafarers’ earning deduction (SED). The conditions are rigorous and are subject to anti-avoidance provisions. As will be seen below, the definition of seafarer is wide and can cover, for example, entertainers working on board a cruise ship.

The definition of ship for SED excludes oil and gas exploration, and has implications for divers, especially where work may be within the UK continental shelf (see working as an employee on board a ship, below).

The SED will be considered under the