A Superyacht Crew tax return is now a fact of life. We have new members joining us every week who have been in the Superyacht industry for years and have never done a tax return. Obviously we ask a lot of them why, and the answers we get are pretty varied. Here are a few:
I’ve never done a tax return because;
I bank offshore so I don’t need to
This is a particularly bad one. If you believe banking offshore means you don’t have to do a return you are mistaken. Banking offshore cannot hide your income from the tax man. The Offshore disclosure facility means that your bank tells HMRC (for example) exactly what you earn and how much you have in the bank. If this has not been declared (via a tax return) you could be in BIG trouble. Not only could you be fined or prosecuted for not declaring offshore income. It could also be viewed that you were attempting to avoid paying tax. This is BAD, REALLY BAD news for you.
I don’t owe anything so why do I need to do a tax return?
This is a bit more simple. Yes, you will probably not have to pay any tax but answer this? How does HMRC know this if you don’t tell them what you do or what you earn? The whole point of doing a Tax return as a Seafarer is to confirm your status. Once it is done, you are on record as a Seafarer who is exempt from income tax. Easy
I thought my salary was tax free because my employer doesn’t deduct any tax
We didn’t realise so many of you thought this until recently and it is really surprising. Your employer, payroll company or management company should have made this clear to you when you started your job. It seems like the message either isn’t getting through or there isn’t actually a message in the first place! There are lots of reasons you do not have tax deducted from your salary but none of these mean you don’t have to do a tax return.
I was told to just keep my head down and it would be fine.
Sadly there is still a lot of this kind of bad advice going around the crew mess! These days you won’t find this opinion on forums, Facebook Groups or from other tax companies. It is only other crew who give this kind of advice and it can get you into trouble. There is absolutely no benefit to this at all and eventually it will come back to haunt you. Probably in a really expensive way!
None of my friends do tax returns
Your friends at home probably get paid by a company and so are not required to do a tax return because they have tax deducted at source. If your friends on yachts don’t do tax returns this is their problem. Do not make it your problem too. Just because someone else doesn’t do something does not mean that it’s ok for you not to do it too. Safety in numbers does not work here. Do the right thing, the benefits are GREAT, and here they are;
So, why should I do a tax return?
Maybe the best answer to this question is WHY NOT. There are literally no negatives to filing your Superyacht crew tax return. Here is a list of the pros and cons;
The PROS
It confirms your position as a Seafarer and therefore (assuming you qualify for SED) you won’t have any tax to pay.
Your tax return (SA302) acts as official proof of income. This is ESSENTIAL when applying for a mortgage. You literally can’t get one without it.
You are in the system. This is a good thing. It means you are a UK tax paying resident.
It’s good for your credit rating
Not only can you get a mortgage. It also means you can set up a pension, ISA, other investments which are VERY tricky to do as a non tax payer.
Your money has been declared and is therefore safe.
The CONS
You have to do a tax return. This is no big deal. You can ether do it yourself or you can pay a specialist company such as Crew Family Office to do it for you. It’s all very quick and easy and requires a small amount of input from you.
You don’t really have a choice. British Crew are now obliged to declare all offshore income by way of a tax return annually.
What now?
That’s the easy bit. Get in touch and we will take care of this for you. As you can see, the Pros outweigh the Cons. The key to your career on Superyachts is making the most of your money. You can’t do this without filing a Superyacht crew tax return. So, what are you waiting for? Let us help you get things moving in the right direction.
Remember: If you are British and work on a SuperYacht you MUST declare your income by filing a tax return every year. There are potentially Heavy fines for those who are caught for not filing.