These days most Superyacht Crew declare their income by doing tax returns. It has taken a long time for the industry to make the most of the benefits that filing (in the UK) brings with it. But, now we see it happening regularly we are pleased so many crew are benefitting from this.
But, are you doing it right?
As Superyacht Crew you MUST declare your offshore income. But we thought we would take the opportunity to raise a few points we have been coming across more and more recently;
Tips are income. If you earn tips, no matter how you get them you must declare them on your tax return. There are two reasons for this;
- You have to. If you don’t declare your tips and HMRC find out, it is very likely you will be fined.
- There is no reason not to. Declaring your tips inflates your income. You still won’t pay tax on them, but it may help when it comes to mortgages or other loans. Remember, higher income means more spending/ borrowing power.
Loads of Superyacht Crew are into Crypto currency at the moment. Some of you are doing extremely well with it too. I you cash in a load of Crypto to buy a house for example it is essential you declare this. The reason is that you may have capital gains tax to pay. Yes, your income from yachts is tax free because of your occupation and how you are paid. However, income from investments is not classed in the same way. Therefore you need to declare it.
Most Superyacht Crew who have been in the industry for more than 4 years have at least one rental property. Remember, you need to declare your rental income too. So, please don’t miss this off your tax return. We will do the calculations but you MUST tell us about it.
Yes we know. Bank interest is a thing of the past but the high rollers amongst you may have a lot of cash sitting in the bank. We hope not and that you have put that money to work. But, if you haven’t and it earns interest you need to declare it.
Stocks and shares
Apart from Crypto, lots of you are using online stocks and shares platforms like Etoro. If you haven’t lost every penny you earned last month day trading then remember this. When it comes to the end of the tax year, any money you have cashed out from your trading account is classed as income. This is also something you need to declare.
Can I just not declare it?
We are getting asked this a lot at the moment and the answer is yes, of course. But, not declaring it is very similar (some would say exactly the same) to tax evasion. HMRC do NOT like this and take a pretty harsh approach to anyone who tries it. Our advice, don’t do it. It’s illegal
What if I set up a company in Panama?
We love to hear about the discussions you have in the crew mess! The number of ideas, schemes and plans we hear of are amazing a pretty creative. But, the answer is still no. You are attempting to evade tax, which is illegal. Don’t do it.
We love to end on a positive note and so here goes…..
- You’ve got a great job and you are lucky enough not to have to pay tax on your salary. Millions of people (probably even people you work with) would give their right arm to be in your situation. UK Superyacht Crew do not have to pay income tax because they are a UK resident amongst other things.
- Don’t push it. Offshore income is one thing, UK income for example is taxable. All we can say is this. You are doing very well. Your job and tax situation gives you the opportunity to invest your money and make even more with it. But that money is taxable.
- If you think you have to pay tax, or are not sure about it, ask. It is not a good defence in court to say “I didn’t know I had to declare it”
If we are your tax advisors then ask us. We are here to help and will point you in the right direction. Remember, if you have to pay tax on a gain it is because you have made money. If you have made money, the tax you have to pay can never turn that profit into a loss. So you are still winning.
Don’t risk fines, investigations or even worse by not declaring.
Talk to CREWFO
We were set up specifically to answer the questions crew have. We are here to help with financial problems, queries and explain issues which may not make any sense to you. We know there are a lot of companies out there who will do your tax, but will they advise you? Will they take the time to answer your questions? No advice is the same as bad advice, it doesn’t help you. If they can’t or won’t advise then change companies.
Get in touch if you have questions, it is always free to talk.
The tax year just ended too, so when you are ready please click here to file your 2020/21 tax return.