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Share fisherman

Income Tax and National Insurance contributions for a share fisherman

Definition

You’re a share fisherman if you work in the fishing industry and you:

  • Aren’t employed under a contract of service
  • Are a master or a crew-member of a British fishing boat manned by more than one person
  • Get all or part of your pay by sharing the profits or gross earnings of the fishing boat

You also count as a share fisherman if you used to work on a British fishing boat, but now work ashore in Great Britain. This could be making and mending gear or any other work for a British fishing boat.

Fishermen employed under a contract of service aren’t share fishermen.

A share fisherman is classed as self-employed. You must register as self employed with HM Revenue and Customs within 3 months of when you first started fishing.

Self assessment tax return

You must fill in a Self-assessment tax return each year. This is so that you can declare all of your income from any source, for example:

  • Self-employment
  • Employment
  • Jobseeker’s allowance
  • Claim any business expenses

You must keep business records to support information you put in your tax return.

Don’t record any tax that’s been deducted by your settling agent on your tax return.

Paying Class 2 National Insurance

When you register as self-employed, you’re also registering to pay Class 2 National Insurance contributions. The rate you pay in the tax year 2017 to 2018 is £3.50 a week. This contributes towards the basic State Pension, the normal range of benefits for self-employed people, and Jobseeker’s Allowance (JSA).

Claiming JSA

If your JSA claim date is between the first Sunday in January and 31 January, you’ll need to pay all the Class 2 National Insurance contributions asked for in your self-assessment tax return as soon as you can, if you haven’t done so already.

HM Revenue and Customs (HMRC) must receive the payment for these National Insurance contributions by no later than 31 January. This is to avoid a delay in getting the contribution-based JSA you may be entitled to.

Class 4 NI contributions

As a share fisherman, you can join a voluntary tax budgeting scheme to help you pay your Income Tax and National Insurance contributions.

Tax budgeting scheme

You can join a voluntary scheme to help share fishermen budget for Income Tax and National Insurance contributions.

How the scheme works

You can authorise your settling agent (payer) to deduct a minimum of 20% each time you’re paid. They’ll put this money into a dedicated, interest bearing bank account in your name (your fishing account). It will stay in that account until your tax and National Insurance contributions become due.

Fill in a Direct Debit mandate; HMRC will take money from your fishing account, usually in January and July. They’ll use the money to clear your outstanding Income Tax and Class 4 National Insurance contributions. They will settle the oldest liabilities first.

Join the scheme

You can register with HMRC as self-employed within 3 months of when you first started fishing. You can contact HMRC to ask for a tax savings scheme form and a Direct Debit mandate.

Fill in the tax savings scheme form and the Direct Debit mandate. Ask your boat owner or settling agent (payer) to witness and sign the savings scheme form. They will send both forms to HMRC’s Fishing Unit.

Your boat owner or settling agent will deduct the percentage you’ve agreed and pay it into your dedicated fishing account.

Deduction rates

The minimum deduction is 20%. But, if you have tax arrears or you earn more than £28,000 (gross) in a year, you must increase your percentage deduction. Do this in multiples of 5%.

To increase your percentage deduction you must fill in an additional Direct Debit mandate.

Claiming sea kit expenses

If you join the scheme, you can claim an allowance for sea kit expenses. This is to cover things like:

  • Protective clothing
  • Oilskins
  • Boots
  • Gloves
  • Stones
  • Bedding

You would not normally be asked for proof of this expense as long as it falls below the agreed figure of £700.

If you are not fishing for a full year, you can only claim a proportion of this allowance. For example, if you have only been fishing for 6 months of the year, you can only claim a maximum of £350.