Crew Services FAQs

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.

http://www.hmrc.gov.uk/nic/work/ss-agree.htm http://www.hmrc.gov.uk/manuals/nimmanual/nim33015.htm

WHAT IF CREW MEMBERS DO NOT HAVE AN INTERNATIONAL BANK ACCOUNT?
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 CREW MEMBER PAYS NATIONAL INSURANCE WILL HMRC CONTACT THEM REGARDS TAX?

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: http://www.hmrc.gov.uk/cnr/seafarersni.htm.

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