claiming tax back if i work on an oil rig?

haggis1978

hello, ive been made aware of an accountant who claims to have found a loophole which will allow me as an north sea based offshore worker to claim all my tax back for the last 4 years. having had a quick conversation with him he says he puts through my oil platform as a foreign port of call and with the days that ive had away from home allows me to claim this all back. i'm ex merchant navy and know this applies to seamen with the foreign port of call but can anyone tell me how he's managing to do this and what the risks are?

I understand if the taxman does want it back i might have to pay interest on it but what percentage would that be?

thanks very much for you help as i am quite ignorant in these matters

PlutoinCapricorn

This forum seems relevant, especially the site they mention https://www.seatax.ltd.uk

http://www.theiet.org/forums/forum/messageview.cfm?catid=205&threadid=34717

Andy_L

Do any of your colleagues do this sucessfully? If they don't then thats an indication that he's having a laugh.

PamVegas

I very much doubt you can do this, otherwise what would be stopping all the oil rig workers doing this (one of which is my husband). But I will be interested to see the responses you get.

PlutoinCapricorn

Yes, "if something seems too good to be true, it probably is". There may be a big catch, but it is worth looking into.

sarahk100574

Hi haggis,

Its not a loophole anyone has found... what your friend is probably referring to is Seafarers Earnings Deductions (referred to as SED usually).
It is a 100% deduction of earnnings for people who meet the correct criteria. (seafarers)
Some rigs are eligible, some aren't. It is largely dependant on whether you are based on an off shore installation (not eligible for SED) or a ship (vessel which can propel itself under its own steam - is ok for SED). For instance, some exploration rigs based on norwegian shelf, and moved occaisionally do qualify, but north sea oil rigs do not usually qualify. I have seen several cases where almost permanent installations have qualified, so defo worth checking on HMRC website for guidlines re your own rig.

At pluto - seems too good to be true, but in this case is 100% legitimate way of receiving a 100% refund of paye for people meeting the criteria. Pretty easy to do if you work at sea... I submit lots of these claims each year successfully through my work as an accountant.

At Pam - if your OH works on a rig and HASN'T heard about SED i'd be very suprised!!;)

Cook_County

For those of us old enough to remember the Spice Girls, the 100% Foreign Earnings Deduction was available for everyone (not just seafarers) until it was abused by the Spice Girls, and abolished soon after for everyone except seafarers.

alex8525

If the Oil Rig you work on is within the UKCS (UK Continental Shelf) then the answer is a no, as the taxman does not consider this as being a foreign port for the purposes of SED.

If your Rig is outside of the UKCS, then you will need to look very carefully at the description of the Rig, and also what your status as an employee onboard is. There has recently been a special Tax Commissioners investigation into the Pride South America case, whereby HMRC basically decided what was and wasn't a Ship for the purpose of taxation and SED. (Pride South America was a drilling ship that could be either a Ship or a Rig)

My best advice to you would be to seek the advice of specialist Marine Tax Accountants on this matter, the main UK agents being Seatax in Cardiff and SK Tax in Leicestershire. I think they would give you initial advice for free, but their yearly service is something like £200, but when you consider what you could claim back if you are eligible for SED, then £200 is a small amount.

partan

if its an oil platform as you say then you've no chance. theyre fixed to the seabed and are plumbed into the wells.
anything directly involved in the exploitation of mineral resources or which does not move does not qualify for sed.

sarahk100574

[QUOTE=alex8525;50116451
My best advice to you would be to seek the advice of specialist Marine Tax Accountants on this matter, the main UK agents being Seatax in Cardiff and SK Tax in Leicestershire. I think they would give you initial advice for free, but their yearly service is something like £200, but when you consider what you could claim back if you are eligible for SED, then £200 is a small amount.[/QUOTE]

hmmmm...... once he has established if his rig is or isn't a ship for SED purposes then a specialist is not necessary unless he has other/complex tax affairs.... and not very MSE to send OP to either of the above when a competent local accountant will do his tax return for much less in most areas. I have come accross people who have been led to believe that SED is complicated, when in fact it is not at all, it is much simpler than SE tax returns for the most part; and as such we charge a reduced fee for the service rather than an enhanced fee...

alex8525

sarahk100574 wrote: »

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hmmmm...... once he has established if his rig is or isn't a ship for SED purposes then a specialist is not necessary unless he has other/complex tax affairs.... and not very MSE to send OP to either of the above when a competent local accountant will do his tax return for much less in most areas. I have come accross people who have been led to believe that SED is complicated, when in fact it is not at all, it is much simpler than SE tax returns for the most part; and as such we charge a reduced fee for the service rather than an enhanced fee...

True, but I use a Marine Tax accountant to handle my SED claims, and have found them very helpful indeed. Not only do they advise me on SED matters, but have helped me claim all other manner of tax reliefs I did not even know I was eligible for. Most also offer in the price a full tax review of Wife / Partner to see if they can reduce their tax liabilities or resolve any issues. I also find it comforting to know I have a buffer between me and the tax man!

I did approach local accountants, however they all advised me to deal with specialist firms such as those mentioned, and I was also told that local accountants probably couldn't match the fee's of the specialists.

Yes granted using a tax agent does involve an initial outlay, but when you consider the multiple thousands of pounds they can recover, coupled with any reduction in tax liability they may be able to arrange, I consider that to be an investment, not expense.