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Yacht Owners hiring a Skipper

Updated: Dec 26, 2023

This post is about the liability of boat owners and a hired skipper

Many yacht owners hire a skipper when sailing long distances or to help them during the first months or weeks when they just bought a boat.

There are many skippers in the world who like to be your captain for some pocket money and expenses. Often young guys or girls with good sailing experiences and just enjoying the life style. And a way to travel somewhere and even to get paid for it. Or some retired people who like to be kept busy.

Many deliveries are settled in cash payments or bank transfers to the skipper and crew in person. It has been going on like this for ages but this is more and more coming to an end.

More and more governments and banks are controlling payments, certainly when the payments are coming from abroad. Banks communicate with the tax authorities and they will start asking questions to the sender and the receiver where the money came from.

Even when an owner is traveling with a lot of cash to pay his/her crew, this may result in a search and confiscation by local customs.

Most skippers act as a private person. Their payments will be treated as an income payment for which they will be charged taxes. In Europe between 40% and 50%. If the receiver "forgets" to put the received amount on his/her tax bill, additional fines will be charged. Result? "Good Bye" skipper lifestyle.

In case the skipper acts as a private person, many EU countries will consider the payment is made based on an employer/employee relationship. In that case, the owner of the yacht will need to pay the social security costs for the skipper and crew.

In that case, the skipper is not a skipper as he can not decide as a captain and therefor he/she will not be liable for any situation on board.

The situation becomes even more complex in case there is a disagreement between parties along the passage. The skipper may put down a claim to the boat owner for damage or non-payment. Or even when an accident occurs. Local authorities will investigate the entire case which may result in huge claims towards the owner of the yacht.

Most insurance companies will ask for the credentials of the skipper and the insurance will make the skipper accountable. Not a problem when the boat sails with a professional crew only. Many problems can arise when owner is on board. In practice, the owner will say: "the skipper is in charge" but the owner will often overrule the skipper in case of a dispute or a different view how to handle things. This is always a ground for conflict and payment disputes. And more: in case the skipper can prove he/she was not in charge anymore, the owner takes the full responsibility hit.

A yacht owner must understand he is taking huge risks hiring a private person as a skipper. Therefor, owners of bigger yachts, generally over 25 meter, subcontracts the exploitation of the yacht to an agent who takes care of all legal stuff, contracts and make sure the crew is paid properly and taxes and social contributions are paid according applicable tax and legal rules. Our organisation is following the same procedure for our skippers and crew now for yachts under 25 meter.

As the yacht owner is making a contract with our organisation, we make sure all legal and tax elements are respected. Offering a piece of mind to the yacht owner.

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