Article Updated: June 10, 2021
Starting a job in any industry can be daunting, but few will be as daunting as taking your first steps into yachting.
For many, this will be their first job outside of the safety net of the country that they grew up in, and will mean an entirely new lifestyle.
Working in yachting will open up experiences and opportunities that you could never dream of in your typical 9-5.
Travelling the world on a new adventure, taking in breath-taking scenery, meeting new and likeminded individuals (as well as the attractive pay cheques!) are all reasons why people make the leap to become yachties.
As there are so many factors to consider at the start of your journey, we have created a rough guide that tells you what you need to know when getting started in the industry, and that we hope will help you make the most of your time in yachting.
Read on to find out more or click a jump menu below to skip to a chapter that interests you.
- Routes Into Your First Job
- Choosing a Vessel
- What To Do With Savings?
- The Boring Stuff
- Do You Need To Make Student Loan Repayments?
- Contact Us or Comment!
Routes Into Your First Job
Everyone working in yachting has their own story of how they got started but typically, there are three main routes lead to a career in the industry, each giving rise to different roles onboard.
The first is completing a cadetship at a Maritime college, which is undoubtedly where a significant proportion of today’s officers and engineers originate from.
Similarly, an engineering apprenticeship such as the course offered by Pendennis Shipyard provides a clear pathway for engineers to make their way into yachting.
The most adventurous route of all is to simply book a flight, pack your bags, and head out to one of the world’s many yachting hubs to start dock walking.
Once you’ve found daywork and gained some experience you can develop your skills and seek a permanent position onboard.
This is one of the many unique characteristics of yachting compared to merchant shipping, and one of its most attractive.
There are a number of websites where you can register to find daywork in the yachting industry.
Image source: https://pixabay.com/photos/yacht-ship-sea-740610/
Choosing a Vessel
Once you’ve made your mind up that yachting is where you want to ply your trade, the next big decision is choosing the type of vessel that you want to work on.
If you are a dayworker looking for your first job you may be inclined to take whatever job you are offered, and when you are just finding your feet this is a great step to take to build your experience.
You should however always keep one eye on your future career path and considering the benefits and drawbacks of each type of vessel is important.
The first distinction to be made is between working on a charter boat as opposed to a private vessel, as each present their own challenges as well as their own rewards.
Charter boats tend to be the most demanding of the two with long seasons and guests that require an attention to detail seldom seen outside of yachting.
You are however rewarded for your labours with more generous gratuities which can make the long days (and nights!) worth it.
After a season or two on a charter yacht you may decide to prefer the slightly less hectic lifestyle onboard a private yacht.
Then arises the debate of sailing versus motor yachts.
There are certainly more motor yachts operating in today’s climate and they typically require greater numbers of crew than their wind-driven counterparts.
However, if your passion lies in feeling the power of nature and the force of the wind, a sailing yacht is certainly your only option.
Once you begin your career as a seafarer, it will soon become evident that unlike working onshore, you will be paid in a variety of currencies.
Opening a normal current account in your home country will often mean that you lose out on your hard-earned money through international transaction charges and poor exchange rates.
For this reason, you will be best advised to consider a multi-currency, international bank account with an organisation such as Standard bank.
Standard’s multi-currency seafarers account will allow you to take payment in a range of the most widely used currencies including USD, EUR and GBP.
Your funds will be held separately in the currency which you have been paid, guaranteeing that you are the only person taking a slice of your salary.
It is however important to remember that holding your income offshore does not automatically mean that you are exempt from taxation.
Your liability to pay tax will be dictated by your country of residence rather than where your funds are held.
(If you are interested in a bank account tailored to the needs of seafarers, we have the facility to assist you with the set up)
What To Do With Your Savings?
After a few months working in the industry, you’re likely to be in for a shock at how quickly you have amassed sizeable savings.
The lifestyle of living onboard whereby you don’t pay rent and your bills and food expenses are covered, will mean you have a lot more spare change in your pocket at the end of each month.
The problem that then arises is how best to put this money to work, rather than simply leaving it sat idle in your bank account.
Over the past year, lots of crew have filled their spare time by investing in cryptocurrencies and are now beginning to realise the profits from their efforts.
If investing your hard-earned cash in cryptocurrencies seems too risky, there are also a number of more traditional methods which you can take advantage of.
Whilst you may find that you have a good understanding of the type of product that you are seeking, we would always advise that you contact a professional before moving forward.
The Boring Stuff
Although yachting is undoubtedly the beginning of an exciting chapter of your life, there is some housekeeping that is required to ensure that you can enjoy your time at sea stress-free.
Whilst taxation is not the most riveting of conversation topics, it is certainly one of the most important.
Unlike working onshore, your employer will very rarely handle your tax affairs for you and your employment contract will almost certainly contain a clause that states this.
It is therefore of the upmost importance that you have an understanding of your obligations whilst working overseas and get your taxes right from the beginning.
After all, you can always plan forwards, but you can’t plan backwards.
Crew sometimes believe that because there is a tax exemption available to seafarers in their country, that they simply do not have to declare their income.
This is dangerously untrue and even though you may not owe income tax, the tax authorities are still expected to be informed of what you have earned.
The Automatic Exchange of Information, on which we recently published an article, explains how tax authorities can access information on both the onshore and offshore holdings of their tax residents.
It has therefore become apparent that previously offshore and invisible income is now very much visible.
It is always best to get it right from the beginning and avoid looking over your shoulder, or worse yet, facing penalties.
This discussion is often followed by one of the most common questions we hear from yacht crew which is "where am I resident?".
There really is no simple answer to this question; your tax residency is entirely dependent on your personal circumstances as well as the jurisdiction in question.
If you qualify as tax resident of any particular country, you will be required to declare your worldwide income in that country.
A common misconception being that you are only liable to pay tax on income sourced from the country in which you are a tax resident.
The world of tax residency can be a minefield, but it need not be.
If you are unsure of where you should be declaring your income, our tax consultation service can provide you with the answers that you need to ensure you get it right, the first time.
Do You Need To Make Student Loan Repayments?
Another issue we regularly see clients querying on forums and social media, is the debate surrounding whether UK seafarers are required to make student loan repayments.
Your requirement to begin repayments depends on whether your income exceeds the repayment threshold associated with either your Plan 1 or Plan 2 student loan, and this is based upon your net taxable income.
For this reason, if you declare all of your employment income under the Seafarers Earnings Deduction (SED) and have no additional income from other sources, you will not have to begin or continue repaying your student loan.
The reason for this is that your income from offshore work on vessels is accounted for on your tax return as an allowable expense meaning that your net taxable income will be considered to be £0.
You do still have the option to make repayments as it is important to remember that although no payments are due, your loan is still accruing interest every day.
For more information regarding the difference in repayment thresholds for Plan 1 and Plan 2 student loans, read our article.
Your career in yachting will not doubt reward you with a raft of opportunities and experiences that your age-mates in desk jobs simply do not have access to.
But it also gives rise to taxation, residency and banking challenges that they will never have to face.
With so much to consider it can become overwhelming, but we are here to help.
If you would like further information with regard to any of the issues discussed in this article, get in touch
Contact Us or Comment!
If you want to know more about matters relating to taxation and banking for yacht crew, we would like to hear from you.
Get in touch with us today or let us know your thoughts in the comments section below.
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Yacht Crew Income Tax Return Checklist
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.