The UK’s updated law on workplace pensions means every employer in the UK must put certain staff into a pension scheme to which the employer must contribute, also known as ‘auto enrollment’. So how will this affect superyacht crew? This is seemingly a difficult question to answer, with lots of grey areas pointed out by the superyacht experts.
The UK government website defines the requirements to enroll as being aged between 22 and state pension age earn more than £10,000 a year and work in the UK. Peter Brooke from The Spectrum IFA Group believes the last requirement is that most pertinent to yacht crew. “Theoretically, if [the crewmember] is on a UK-flagged boat and employed by a UK company, then this should mean they are ‘working in the UK’. The question remains as to whether the company employing them would consider this too, and if it would be policed by HMRC,” explains Brooke, who also acts as a crew finance advisor for Horizons.
The Crew Report asked management company West Nautical, who explained domicile and varying international legal requirements blurred the lines even more. “More important is the residency of the seafarer themselves, plus the nationality and regional jurisdiction of the crew employers, which will not be UK-based, but more likely Guernsey, Hong Kong or Isle of Man, which again muddies the waters and makes this less clear,” admits Geoff Moore, West Nautical’s managing director.
"What we understand is if the crewmember joins the vessel from a UK port then they are put into auto enrollment. If they join outside the UK then they aren't," explains Mark Jaenicke, recruitment and HR manager at Viking Recruitment.
The disinterest from the industry has seemingly been mirrored by HMRC, with little information specific to yacht crew out there, possibly because of the sheer task of applying this UK legislation to international superyacht crew. “I cannot see foreign flagged vessels operated by foreign companies being subject to this, but I am also doubtful whether there would be any way that the government could enforce this,” says Patrick Maflin, CEO of Marine Accounts.
The disinterest from the industry has seemingly been mirrored by HMRC, with little information specific to yacht crew out there, possibly because of the sheer task of applying this UK legislation to international superyacht crew.
While it would seem likely this can be attributed to the grey areas so ironically prevalent when it comes to superyacht crew and their finances – particularly tax – there is also the question as to whether it’s actually in the interests of the crewmember and the government to auto enrol. As Brooke points out, the fact that many of the crew are unlikely to be UK tax payers and thus won’t receive tax relief on contributions means there is a question over whether it is in the crewmember’s interest to be enrolled in a UK pension; on the other hand, is it in the interest of the pension scheme to administrate what could be tiny pension pots for international individuals?
Brooke summarises the situation in a way that seems to echo that of every industry expert who has voiced an opinion thus far: “To me the whole thing could become a nightmare to monitor and manage."