Crew Services FAQs

What are the issues needing an Offshore Employment Structure?

i. MLC, 2006

The International Labour Organisation Maritime Labour Convention (2006) (MLC, 2006) was ratified in August 2012 and has been enforced since August 2013 for Passenger Ships but commercial yachts have been given a further 12 months in order to comply. MLC, 2006 requires several key areas for audit (see question 5 below) but the specific item that will affect yachts and the crew employers is that all crew employers must be able to demonstrate that they are able to deduct and pay social security contributions on behalf of the crewmember.

ii. Complying with social security requirements

Traditionally yacht crew were paid a gross salary and left to make any necessary social security or tax deductions themselves. Due to the complexities of collecting social security charges the yachting industry was, in the past, largely ignored by the authorities. Today the situation has changed and countries particularly within Europe, have made it clear that they now intend to collect charges from yacht crew where applicable.

Laws related to EEA social security payments changed from 1 May 2010 to allow social security governing bodies easier access to expatriate (including seafarer) employment structures. Establishing a proper offshore payroll and crew employment service ensures that the employer's liabilities for social security payments are minimised and that the required mechanism is in place to make deductions from crew members pay where these are required.

iii. Benefits of social security arrangements

A large number of yacht crew have made no or inadequate provision for their future or for long term health care in the case of injury or serious illness. Most yacht Owners will be pleased to honour all of their contractual obligations to a crewmember in such a situation, however payments are unlikely to continue for longer than specified in the terms of the applicable insurance policy (usually a maximum of two years).

By establishing a formalised crew employment structure, crewmembers are encouraged to either make regular National Insurance contributions if required or on a voluntary basis or to make their own alternative social security arrangements.

Who are Burgess Crew Services (Guernsey) PCC Ltd?
Burgess Crew Service (Guernsey) PCC Ltd are a wholly owned off-shore subsidiary of Burgess. The Company was set up in Guernsey (which is not part of the EU/EEA) as an off-shore crew employment and payroll company in order to employ and pay crewmembers in a professional and legitimate manner and in full compliance with the requirements of the MLC.
Why does the yacht owning company, currently employing the crew members, now need to change to an offshore structure if they didn’t need it before?

Employment arrangements for the crew have become an important issue in many countries due to the attention the authorities are paying towards employee and employer social security contribution liabilities. Burgess and yacht owning companies are receiving an increasing number of requests from authorities for social security information for crew on Burgess managed yachts. In the UK HMRC (Her Majesty's Revenue and Customs, the authority responsible for collection of national Insurance and taxes) are focusing on areas of previously untapped income, they are investing more time and resources into investigating this particular area. In May 2010 the rules applying to social security for expatriate workers (this includes seafarers) were tightened up to allow HMRC and other social security authorities easier access to payrolls and areas of previous ambiguity were clarified.

There are three key factors which determine whether or not a yacht crew employer is required to pay social security:

i. The location of the yacht crew employer - if it or any part of the business has a place of business in the EU/EEA.

ii. The flag of the vessel – if the yacht is flagged in the EU, UK or Isle of Man

iii. The residence of the crewmembers – if any of the crewmembers are resident in the EU or EEA.

What is the Maritime Labour Convention, 2006?
MLC, 2006 is a comprehensive International Labour Convention that was adopted by the International Labour Organization (ILO) in February 2006 in Geneva, Switzerland. It sets out seafarers' rights to decent conditions of work and helps to create conditions of fair competition for shipowners. It is intended to be globally applicable, easily understandable, readily updatable and uniformly enforced.

It has been designed to become a global legal instrument that will be the fourth pillar of the international regulatory regime for quality shipping, complementing the key Conventions of the International Maritime Organization (IMO) such as the International Convention for the Safety of Life at Sea (SOLAS), the International Convention on Standards of Training, Certification and Watchkeeping (STCW) and the International Convention for the Prevention of Pollution from Ships, 73/78 (MARPOL).

All commercially registered yachts above 500gt require a Maritime Labour Certificate and a Declaration of Maritime Labour Compliance for the yacht and Owning company (also known as a DMLC part I and part II) to ensure compliance with the MLC, 2006.

All commercially registered yachts under 500gt require only the DMLC part I and part II.


Issuance of this document is evidence that the ship has been found to meet the requirements of the Convention and that the seafarer’s working and living conditions meet national requirements. It is issued by the flag State following the necessary inspections to verify the vessel is in compliance with the applicable national laws and regulations implementing the Convention requirements.

In most instances it can be expected that the assessments will be carried out by an organization recognized by the flag State which will usually be a classification society (ABS, Lloyds, DNV).

The Certificate is subject to periodic validation based on intermediate, renewal or additional inspections as determined by the Flag State. It has an initial validity of five years.


The DMLC is a unique form that must be completed by both the competent authority in the Flag State and the shipowner as Parts I and II respectively.

Part I is completed by the Flag State and it provides the requirements for the ship type, details of any substantially equivalent provisions under the national law and indicates any exemptions granted by the Flag State. It also contains a list of the areas to be inspected together with national provisions and requirements.

Part II is completed by the shipowner and must be reviewed and approved by the Flag State. It consists of the proposed measures that will be taken for initial and on-going compliance with the national requirements contained in DMLC Part I and the MLC, 2006.

What changes will my Yacht need to make in order to comply with the new MLC, 2006 requirements?
A commercial yacht will need to obtain a Declaration of Maritime Labour Compliance (DMLC). The yacht owning company will need to obtain a DMLC Part II.

The DMLC is in two parts. DMLC-Part I is to be completed by an attending surveyor and will identify the topics for inspection, and list the relevant legislation implementing the MLC, 2006 together with any substantial equivalents and exemptions that have been granted.

The DMLC-Part II is to be completed by the shipowner (this will be undertaken by BURGESS and Burgess Crew Services) and verified by the attending surveyor when the first inspection is completed. The Part II declaration details the measures adopted by the shipowner to ensure on-going compliance of the MLC, 2006. The areas covered are:-

1. Minimum age regulations

2. Medical certification regulations

3. Qualification of seafarers regulations

4. Seafarers’ employment agreement regulations

5. Use of any licensed or certified regulated private recruitment and placement service regulations

6. Hours of work or rest regulations

7. Manning levels for the ship regulations

8. Accommodation requirements

9. On-board recreational facilities

10. Food and catering regulations

11. Health and safety and accident prevention regulations

12. On-board medical care regulations

13. On-board complaint procedures regulations

14. Payment of wages regulations

Why doesn’t my current employer set up a Company in Guernsey or other off-shore state?
Setting up an off-shore entity incurs considerable cost and for one yacht the cost per crewmember would be very high. Burgess Crew Services is able to spread this cost across the many yachts.
Is it compulsory for crew members to pay National Insurance?

Crewmembers that are resident in the EU or EEA working on an EU, UK or Isle of Man flagged vessel are required to pay social security. Currently non EU and EEA resident crew are not required to pay social security and crew working on yachts flagged outside of the EU, UK and Isle of Man are not required to pay social security.

All crewmembers employed by Burgess Crew Services (Guernsey) will be required to complete a HMRC Questionnaire (link below) so that it can be determined whether social security needs to be deducted. The form is then sent to HMRC so that they are able to determine at what rate NI the crewmember will be required to pay.

If a crew member is already making social security payments in their country of residence or domicile do they need to change anything?
No, at this time, if a crewmember is already making contributions in their country of residence/domicile or wishes to make contributions in their country of residence/domicile rather than in the UK then they should contact their social security authority and ask how they can do this but this will be an agreement between the crewmember and them. If the crewmember is resident in the EU or EEA then they will be asked to provide some form of proof that payments are being made to ensure the yacht remains compliant.
What if crew members are day workers or relief crew, will they be employed by Burgess Crew Services (Guernsey)?
Day workers are not employees, they are taken on by the Captain on a daily basis to achieve certain tasks. They do not stay on the yacht. They are covered by the yacht's P&I insurance but not the Crew Medical Insurance. Relief workers can be employed by Burgess Crew Services (Guernsey) or paid a daily rate by the yacht. It is recommended that crewmembers employed on the yacht for a calendar month or more should be employed via Burgess Crew Services. If they are employed by Burgess Crew Services then they are covered by the yacht's Crew Medical Insurance, otherwise they are only covered by the yacht's P&I insurance and they can either be paid by the Captain or via an invoice.
Can the necessary deductions and payments be made for US resident crews employed on US flagged vessels?
The necessary deduction of US tax and social security can be deducted from the US resident crewmember’s salary and paid to the relevant governing body in the US. The relevant end of year returns will be sent to the US authorities and the relevant information provided to the crewmember so they can complete their end of year tax return.
Why not pay only the affected crew on the yacht via Burgess Crew Service (Guernsey)?
When a yacht is audited by a social security government department the payroll system used has to be applied to all crew not just affected crew otherwise the system is considered a sham and liabilities will still exist and fines may be applied.
Why do Burgess Crew Services (Guernsey) pay UK National Insurance and not the equivalent the crew members’ country of residence/domicile?

Burgess Crew Services (Guernsey) are able to make social security contributions to the UK only at this time. Most countries in the world that have a similar scheme in place will have a reciprocal agreement with the UK (see the links below regards reciprocal agreement countries). Social security can be paid to the UK and then, provided there is a reciprocal agreement, the contributions may be transferred once the crewmember returns permanently to their place of residence/domicile.

Burgess Crew Services (Guernsey) has set up an arrangement with Barclays International in order to make it easier for employees to open an international offshore bank account; however there are many other international offshore bank accounts available.
What are the risks if there is a liability for a crew member and/or employer to pay social security charges?
Currently the risk is low, however it is increasing rapidly. HMRC and many other social security authorities are investing more resources dedicated to investigate yachts and crew. Once a yacht has been identified as having a liability the crew employer and crew are liable for all social security back pay for up to six years plus a fine for non payment. We have been advised, following the clarification of the applicable rules in May 2010, provided the yacht owning company has taken steps to correct the situation it is most unlikely that any back pay or fine would be imposed.
What financial controls does Burgess Crew Services (Guernsey) provide?
Burgess Crew Services have set up a Protected Cell Company (PCC) to provide a cost effective method of segregating and protecting each yacht’s assets. The aim is to ensure that if one owning company fails to provide funds to meet the payroll costs, the salaries to crew in the other PCCs will not be affected. By using a PCC the assets and liabilities of each PCC are ring fenced.
What if crew members would like to pay National Insurance if it is not compulsory?

Crew members employed by Burgess Crew Services (Guernsey) have the means to have social security payments deducted from their salary. Crew members wishing to pay social security need to have a National Insurance number. We can move crew with an NI number onto a scheme directly.

Crew members who do not have an existing NI number will need to apply for one which we are happy to assist with. This will be a Guernsey NI number which will only be useable in Guernsey.

Until we receive confirmation stating otherwise crew members wishing to pay NI will pay Class 1 NI contributions (currently 11%) until a notification is received from HMRC stating otherwise.


If a crewmember pays UK National Insurance HMRC will receive an annual P60 at the end of the tax year (April). The P60 states total earnings for the year and social security contributions deducted and paid. If it is the aim of the crewmember to move social security contributions under a reciprocal agreement they should keep copies of this form, replacement forms cannot be given.

A copy of the P60 will be provided to the crewmember and a copy sent to HMRC. If a crewmember paying NI is resident / domiciled in the UK then they will very likely be contacted by HMRC in order to complete a tax return for that year. If they are resident or domiciled elsewhere in the EU or EEA then HMRC may request proof of payment of tax or proof of exclusion of payment of tax.

It is appreciated that some crewmembers may believe this is a concern, however as long as all the requirements as a mariner/crewmember are fulfilled according to HMRC guidelines, tax should not be payable. Please note that tax is a personal matter and Burgess Crew Services (Guernsey) as the Employer cannot assist crewmembers with tax returns. It is strongly recommended that crewmembers use a maritime experienced accountant such as Seatax (there are other maritime accountants available).

What is the difference between Social Security and Tax?

Social Security or National Insurance (NI) as it is known in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits. This is split between an Employer and an Employee contribution where contributions are deemed necessary. In certain circumstances only an Employee contribution is required (see below the 'Yachts in Build' section where this may be applicable for seafarers).

Tax is a financial charge or levy imposed on a taxpayer and is a personal matter related to a crewmember. The Employer does not get involved with tax matters.

Why use Burgess Crew Services (Guernsey) and not another service provider?
The crewmember and yacht owning company will be receiving the expertise of the highly qualified and experienced Burgess Management team coupled with the experience of Burgess Crew Services (Guernsey) in crew employment and payroll services. We have set up an operation designed to comply with current and incoming legislation and withstand the rigours of close auditing from the authorities. A payroll service alone does not satisfy the regulations and it is important that crew management is provided by a team familiar with the yacht and the particular operation.
How much is the crewmember’s contribution?

Depending on how much time the crewmember spends residing ashore in Europe as opposed to onboard the yacht they may need to pay Class 1 contributions (up to 11% of their monthly salary) or voluntary contributions which can be as low as £12.05 per week. In order to find out what contributions a crewmember may make they will need to discuss this with HMRC directly.

For further information regards mariners social security payments please see the following internet link:

Yachts in Build and National Insurance
Crew employed by Burgess Crew Services (Guernsey) PCC Ltd during the build phase of the yacht being built in the EU and any crewmembers who are employed to work on the project who are resident or domiciled in the EU or EEA will need to pay employee’s Class 1 National Insurance contributions. This will be deducted from their salary.

At Burgess, we aim to provide an excellent user experience throughout our website to ensure the best service is received by our visitors. We achieve this by using cookies, which store a little information from your browser. If you would like further details regarding the information that is stored, please see our privacy and cookies policy.

Start typing to search. Hit escape to exit.