Income Tax (Earnings and Pensions) Act 2003 section 381

Taking account of other deductions

Section 381 requires that when calculating a seafarer's earnings for the purposes of the seafarers' earnings deduction, all other employment income deductions must be stripped out first before the deduction is applied.

• Earnings for the seafarers' earnings deduction are calculated after removing all other allowable employment income deductions for the tax year
• Deductions taken into account include mileage allowance relief, general employment income deductions (Chapters 2–5 of Part 5), capital allowances treated as earnings deductions, and contributions to registered pension schemes
• This prevents the seafarers' deduction from displacing other full-year deductions that would otherwise be squeezed into only part of the year
• The net earnings figure after these deductions is then apportioned between eligible and non-eligible periods for the seafarers' earnings deduction