Breaking News: Brexit and Tax

Brexit’s effect on the UK remains as unpredictable today as it did on 23rd June 2016.

In fact, the only thing we can be certain of at this point is the UK will be leaving the EU at some stage.

As of 28th October, the EU has agreed to a flexible extension of the withdrawal date, meaning that we can leave the EU at any point up to the 31st January 2020.

Prime Minister Boris Johnson is pushing for a general election on 12th December, which he hopes will enable him to expedite the Brexit process.

Yet the rumour mill is in full force amongst UK seafarers, with stories abounding that the Seafarers Earnings Deduction (SED) will be abolished once the UK is no longer a member of the union.

In this article, we uncover the facts and fictions surrounding this issue and what seafarers must do in preparation for when the UK does finally break free from of the European Union.

Read on to find out more or click a link below to skip to a preferred chapter:

Chapters

Are the Rumours True?

As the UK’s tax laws are not dictated or affected by EU regulations or directives, this is by no means the case.

The SED will remain in place for the foreseeable future with no current discussions about the deduction being reduced or removed.

As many of you may be aware, the yachting community are not famous for their inclination to declare their income to the authorities, even since the introduction of the Automatic Exchange of Information.

The UK has therefore adopted a very intelligent position that encourages those who may not have otherwise declared their offshore income, to disclose in the UK.

It follows that it is highly likely a portion of this income will be reinvested in to the UK economy.

The current system facilitates a position, by which income that would otherwise have remained undeclared, benefits the UK economy, whilst allowing you to achieve tax transparency.

As such there does not seem to be any reason why this system would be changed post-Brexit.

Singapore Skyline

Image source: https://pixabay.com/photos/skyline-cityscape-buildings-255116/

The Post-Brexit Outlook

Whilst you may be much more likely to hear the prediction of post-Brexit doom and gloom, quiet whispers have begun to circulate of a bright future with exciting opportunities ahead.

As scaremongering continues, many are now discussing the prospect of the UK as a corporation tax haven for European businesses.

Industry sources suggest that UK policy makers will defy the wishes of the EU and drop corporation tax below the level of any of the other 27 current EU members.

Could the UK become the Singapore of the west?

Only time will tell.

Now's The Time To Take Advantage

If you haven’t yet bought your tax affairs up to date, it’s certainly not too late to enter the UK system.

As an EU citizen, current processes allow an easy path to migrating your affairs into the UK system and you have until October 2019 (presently) to take advantage of this.

If you’re not yet taking advantage of the deduction, it may be time to begin asking yourself why not.

You will need a UK National Insurance number and an address to begin the process.

If you are a non-EU citizen with enough ties to the UK, as long as you do not have tax residency elsewhere, you too are welcome to take advantage of the deduction.

Hourglass and Money

Image source: https://pixabay.com/photos/hourglass-money-time-investment-1703349/

Conclusion

In summary, despite the predictions of post-Brexit hardship, the future looks brighter than many might like to say.

The UK taxation system will remain arguably the most forgiving in the world for Seafarers, and UK based businesses may yet reap the benefits of leaving the EU too.

Speak to Us or Comment!

If you have concerns about your yachting income and taxes post-Brexit, we'd like to hear from you. Get in touch with us today or let us know your thoughts in the comments section below.

Liked this article? Try reading:
Brexit: The Impact on Seafarers

Any advice in this publication is not intended or written by Marine Accounts to be used by a client or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party matters herein.