Hi, just had a phone call from a client who has asked for some advice re his daughters tax situation.
She started working on cruise ships in January and is paid in US dollars and is effectively self employed. She will be working approximately 8 months on the ship in any one year, and spending the remaining 4 months doing waitressing in the UK. Is her cruise ship income taxable?!
Liz
I can't think of any reason why it wouldn't be taxable income.
She would appear to be remaining UK resident, and she's not away for long enough to claim Seafarer's Earning Deduction, so as far as I can see she would declare it as self employed income on her self assessment tax return.
Hope that helps (a bit!)
Helen
PS It would be interesting to know why they think it might not be??
Hi Liz
I agree with Helen. Found this advice on one of the cruise liners sites (you probably should check with HMRC is its up to date) and also the second bit of info from HMRCs site (link enclosed for HMRC)
''When a person receives an income above the provided personal allowance, and is a resident of the UK or is based in the country for tax purposes, he or she is required to pay tax regardless of whether a part of that work is carried out abroad or overseas, such as the case of cruise ship employees. This means that even when you are working at sea, all your incomes will still be taxed by the HMRC. These include your earnings from employment/self-employment, pension income (state, company and personal), interest on savings, income from shares, rental income, and trust income.'' ''As a cruise ship employee, you may also be able to reduce your tax bill through the Seafarers' Earnings Deduction. This tax relief can be claimed by UK residents working on ships, provided that the following criteria are met:
Work on aship, e.g. tankers, cargo vessels, passenger vessels and cruise liners. Off shore installations such as oil rigs are not included. Completed at least 365 days of employment as a seafarer, which begins and ends with a period abroad, and must not spent 183 continuous days in the UK. Must complete at least one voyage in a year that begins or ends in a foreign port.''
Complete the usual self assessment form, plus additional forms as per the enclosed
I'm sure it is taxable as they are ordinarily resident in the UK still.
I know quite a few people who have worked the cruises including several of my husband's ex students who are about to start contracts. I'll see if they know (though dancers are not known for having much tax knowledge!)
