Modified national insurance contributions arrangements
HMRC have identified common errors made by employersoperating certain modified national insurance contributions arrangements. These are:
- EP APP7A – Modified Class 1 and Class 1A national insurance contributions for expatriate employees subject to an EP Appendix 6 agreement.
- EP APP7B – Modified Class 1 national insurance contributions for employees assigned from the UK to work overseas.
Employers and/or their agents who operate these schemes have to estimate two things here. Firstly the earnings paid to or for the benefit of employees in year when calculating Class 1 national insurance contributions. And secondly the amounts of general earnings chargeable to income tax when assessing Class 1A national insurance contributions due on benefits.
The new guidance has been designed to assist employers and/or their agents understand how erros commonly arise and how they can be avoided.