If you are Superyacht Crew you MUST declare your income:
*This article is aimed at British Superyacht Crew but the rules are similar in most countries.
There’s nothing wrong with earning money offshore as long as you declare all income and gains on your UK tax return. There are two reasons for doing this;
- Your income cannot be tax free until you declare it via a tax return.
- Non declaration of offshore income (your yachting salary) is now an offence
The government is getting tougher in its approach to tackling those who don’t declare the correct amounts of tax due on their offshore income and assets. New international collaboration to share information and laws to tackle non-compliance has started. However, there’s still a chance to bring all your tax affairs up to date if you have worldwide income that’s not been taxed before.
Undeclared offshore income
If you need help to decide whether you should be doing a tax return, ask us. We can help you check your affairs and discuss the options if you need to make a disclosure.
If you do have undeclared offshore income you need to act NOW. All British Superyacht Crew MUST declare all offshore income in their Self Assessment tax return.
If you’re not resident in the UK for tax purposes (a UK taxpayer) you may still have to pay tax in the UK on some income and gains. You should check what’s taxable and check your residency status. We can do all this for you.
Why should you disclose now?
Over 100 countries have committed to new international agreements that will let HMRC see more about overseas accounts held by you. If you’ve declared your taxable income and gains you have nothing to worry about.
If you haven’t declared your income and gains and HMRC finds out later, you’ll face an investigation and will have to pay the undeclared tax with a penalty (of up to double the tax you owe), and could even face prosecution.
Financial institutions are already collecting information on your overseas accounts. All offshore banks are required to pass on details of earnings, savings, account balances etc to your home tax office. If you don’t tell them, they will find out anyway…
HMRC will get much more information about your:
- overseas accounts
- insurance products
- other investments, including those held through overseas structures such as companies and trusts
The information includes details of either:
- who’s holding the account or asset
- who owns the entity holding the asset including their:
- date of birth
- the balance of the account
- payments made into it
HMRC will use this information to tackle those who’ve not paid their taxes, so tell them before they come to you.
Most of the text above is an extract from the HMRC website.
The thing that is important for ALL Superyacht Crew to understand is this;
- You must declare your income each year in a tax return
- You cannot hide your income in an offshore bank.
- If HMRC (or your home tax authority) catches up with you before you declare your income there can be very large fines to pay
- UK crew have absolutely nothing to hide. Doing a tax return as a UK crew member has no negatives.
- Most UK crew will have no tax to pay anyway.
So, if you are not sure if you have your banking right, think there may be a better account for you or just want to check what you are doing is right, get in touch.
Or, if you are not declaring your income you need to do something ASAP before you are caught out. Get in touch with us and we can help.
CREWFO has been helping Superyacht Crew with Tax, Banking, FX, investments, property and mortgages since 2015.
**Please note. This Blog is aimed at UK yacht crew specifically. However a lot of these principals do apply to other nationalities. DO NOT assume that this does not apply to you. Get advice and make sure you know what you need to do.**