I have a potential client who is a German citizen and studied in the UK from 2009-2012. He then worked on a cruise ship from July 2012 until September 2012 where he earned 31K in total. He didn't return to the UK at anytime
Obviously under the old rules, he would be considered as a not ordinarily resident but resident in the UK since he was not outside the UK for one full tax year. However, he meets the criteria for Seafarers’ Earnings Deduction as he was working on a cruise ship for more than 365 days away from the UK.
He returned in the UK on 1st October and has been in the UK since and now is looking for a contract/job in the UK. He has a house in the UK. I understand under the Statutory Residence Test that he would be resident in the UK and split year apply.
How would the income be taxed considering he maybe entiled to seafarers’ earnings deduction ?
His only income is from the cruise ship where he earned and been paid 11K in tax year 2012/13 and then in 2013/14 he is due to be paid another 20K (not be paid yet) and may decide to get paid after the financial year. He has not registered for self assessment but presumably he would need to file a tax return for both tax years but 2012/13 income would be covered by 100% seafarers earning deduction but for 2013/14 since he is going to be paid after he left employment he would need to be taxed on this income or would this still be covered by seafarers’ earnings deduction ?
If there is no tax to pay does he still need to notify HMRC via a self assessment since he is late for 2012/13 and will incur penalties ?
