Paying taxes when working on a cruise ship?
Discussion
Quick question for my sister as she is clueless.
She has just been given a contract to work on a cruise ship as a singer/dancer for a year. She has been a self employed singer/dancer for years but this is the first time she will be working on a cruise ship.
The company have told her that she doesn't have to pay tax whilst at sea or outside of the UK but she will be docking in Southampton every few weeks for the first few months so she's not sure about how she needs to work it out. She will be self employed and will fill out a tax return at the end of the year.
Anyone have any ideas on how it works?
She has just been given a contract to work on a cruise ship as a singer/dancer for a year. She has been a self employed singer/dancer for years but this is the first time she will be working on a cruise ship.
The company have told her that she doesn't have to pay tax whilst at sea or outside of the UK but she will be docking in Southampton every few weeks for the first few months so she's not sure about how she needs to work it out. She will be self employed and will fill out a tax return at the end of the year.
Anyone have any ideas on how it works?
Edited by Deluded on Thursday 24th February 12:58
Deluded said:
Quick question for my sister as she is clueless.
She has just been given a contract to work on a cruise ship as a singer/dancer for a year. She has been a self employed singer/dancer for years but this is the first time she will be working on a cruise ship.
The company have told her that she doesn't have to pay tax whilst at sea or outside of the UK but she will be docking in Southampton every few weeks for the first few months so she's not sure about how she needs to work it out.
Anyone have any ideas on how it works?
Here's some guidanceShe has just been given a contract to work on a cruise ship as a singer/dancer for a year. She has been a self employed singer/dancer for years but this is the first time she will be working on a cruise ship.
The company have told her that she doesn't have to pay tax whilst at sea or outside of the UK but she will be docking in Southampton every few weeks for the first few months so she's not sure about how she needs to work it out.
Anyone have any ideas on how it works?
She is almost definitely still a UK tax resident so she WILL be liable to Income Tax and National Insurance on the income she derives from her entertaining activities - no matter where she performs them.
As she is self-employed, she will include that income as part of her overall income for entertaining and return it under the Self Assessment system, as she no doubt already does.
As she is self-employed, she will include that income as part of her overall income for entertaining and return it under the Self Assessment system, as she no doubt already does.
greygoose said:
Deluded said:
Quick question for my sister as she is clueless.
She has just been given a contract to work on a cruise ship as a singer/dancer for a year. She has been a self employed singer/dancer for years but this is the first time she will be working on a cruise ship.
The company have told her that she doesn't have to pay tax whilst at sea or outside of the UK but she will be docking in Southampton every few weeks for the first few months so she's not sure about how she needs to work it out.
Anyone have any ideas on how it works?
Here's some guidanceShe has just been given a contract to work on a cruise ship as a singer/dancer for a year. She has been a self employed singer/dancer for years but this is the first time she will be working on a cruise ship.
The company have told her that she doesn't have to pay tax whilst at sea or outside of the UK but she will be docking in Southampton every few weeks for the first few months so she's not sure about how she needs to work it out.
Anyone have any ideas on how it works?
The OP specifically said that his sister was a self employed entertainer.
If you earn your money outside of the UK and it's waters, then you're not liable for UK income tax. This however only applies if you're on average not in the country for more than 90 days every year.
NI contributions are optional if the above applies, however paying the minimum contribution is a good idea.
NI contributions are optional if the above applies, however paying the minimum contribution is a good idea.
Edited by dvs_dave on Thursday 24th February 15:25
Cyberprog said:
She will most likely not be considered as self employed (think IR35 here) by the IR, and should instead be a PAYE employee of the cruise company. She won't be free to work for other companies as she'll be on their ship doing their job.
IR35 NEVER applies to those who operate as individuals. If she does not operate through her own limited company or through a partnership, she need not worry about IR35.Most entertainers, singers, performers etc whether based on cruise ships or on dry land are taxed on a self employed basis. Occasionally, HMRC might try to contest that a performer should really be an employee but in almost all cases they have brought in this areea, they have lost. The only performers who would stand to be bona fide employees would be those who are permanent members of permanent performing companies, such as the Royal Opera Company or the English National Opera.
Obviously, tax residency status would be a factor in deciding whether she needs to pay UK tax but unless she fulfills the strict non-residency criteria, I would suspect that she will need to return this income in the normal way.
Not ordinarily resident rules:
No more than 180 days in the UK any one year.
The average over a 4 year period must not exceed 91 days per year.
Partial days count as a single day.
When declaring not ordinarily resident status in the UK to HMRC, one must declare where one is resident on one's tax return (there is a section for this). You can't be completely non-resident, only non-resident in the UK and resident in another country. Taxes will then be payable/liable in that country of declared residence.
No more than 180 days in the UK any one year.
The average over a 4 year period must not exceed 91 days per year.
Partial days count as a single day.
When declaring not ordinarily resident status in the UK to HMRC, one must declare where one is resident on one's tax return (there is a section for this). You can't be completely non-resident, only non-resident in the UK and resident in another country. Taxes will then be payable/liable in that country of declared residence.
If she's got a seaman's discharge book(blue hardbound thing about the size of the old proper passports) from the MCA, she will probably be able to claim the income tax back if the ship visits at least 1 port outside the UK and she spends at least 184 days outside the UK in any 12 month period. It's not quite that simple but that's the gist. Unless you like dicing with HMRC formfilling, do what a large number of seafarers do and use a specialist accountant. 2 popular ones I know are sktax and seatax, but google will turn up others. They usually charge between £150-200pa as long as your tax affairs are vanilla.
hidetheelephants said:
If she's got a seaman's discharge book(blue hardbound thing about the size of the old proper passports) from the MCA, she will probably be able to claim the income tax back if the ship visits at least 1 port outside the UK and she spends at least 184 days outside the UK in any 12 month period. It's not quite that simple but that's the gist. Unless you like dicing with HMRC formfilling, do what a large number of seafarers do and use a specialist accountant. 2 popular ones I know are sktax and seatax, but google will turn up others. They usually charge between £150-200pa as long as your tax affairs are vanilla.
Before she can claim tax back, she has to accumulate the required days out of the country in the first place, as you said. I cant remember, but I think the tax free thingy only starts after that date, could be wrong.You mentioned Seatax, good company, I used them for 10 years, that is the only way to, get a tax consultant who understands seamans tax. I only paid around £150 a year, that include them filling in your tax return for you.
Lots of things she needs to know, like if you are counting days out of the country, and berth at 2359, that day doesnt count, you are now in UK, if the ship berths 0001, the previous day does.
Listen to no one, get a tax accountant. Your post is good advice.
I might add, if the cruise ship is foreign registerd, getting a British Seamans book may be difficult, and another thing, if you do it by post, rather than going into their offices, its cheaper as well.
Eric Mc said:
I wonder would her employment/self-employment status have an effect on her ability to get a Seamen's Book?
This is an area I know very little about as all my clients are landlubbers.
Ditto; I'm aware of SED because I'm a seafarer, but TBH I have no idea whether entertainers have to do the basic STCW stuff and get the blue book. Theoretically they should because they're working on a ship, not SLF, but I know nothing about cruiseliners and how they work.This is an area I know very little about as all my clients are landlubbers.
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