National Insurance – Working overseas
HMRC have updated their technical guidance in relation to the national insurance position of individuals who work abroad.
Working in the European Economic Area (EEA)
New rules have been introduced from 1 May 2010 as part of the UK’s responsibility in implementing new European Union regulations. The rules are relevant where under EU legislation an employee is required to pay social security contributions in another member state. Under these circumstances no UK national insurance contributions are due. The EU regulations provide for a new system of forms so that employers and employees can demonstrate that social security payments have been handled correctly. The new form (A1) replaces the old (E101) form from 1 May 2010.
Working in Social Security Agreement Countries
There are special rules for individuals working in the following countries:
Barbados, Bermuda, Canada, Israel, Jamaica, Japan, Jersey and Guernsey, Korea, Mauritius, Philippines, Turkey, United States of America, Yugoslavia (not including Slovenia). Special rules also apply for employees working in the Isle of Man.
In most cases these rules require employees to pay social security contributions in the country they are working in. A summary of the rules can be found atwww.hmrc.gov.uk/nic/work/ss-agree.htm
Working outside the EEA, Switzerland or Social Security Agreement Countries
For all other countries, the rules usually require employees to pay Class 1 national insurance contributions for the first year they are abroad where all the following conditions are met:
– the employer has a place of business in the UK, and
– the employee is ordinarily resident in the UK, and
– immediately before starting the employment abroad the employee was resident in the UK.
A summary of the rules can be found at www.hmrc.gov.uk/nic/work/out-ee-area.htm