HMRC clarifies NICs for ad-hoc overseas workers

Employees who work overseas on an ad-hoc basis have greater clarity over National Insurance compliance after HM Revenue and Customs’ (HMRC) rewrite of the rules for National Insurance Contribution (NIC) payments.

The updated Social Security (Contributions) Regulations (SSCR) outline the rules that stipulate which payments should not be treated as general earnings for Class 1A NICs for employees who ‘perform duties abroad’.

The SSCR published by HMRC helps to clarify the position for those employees who perform a fraction of their duties abroad and incur travel costs and expenses in the process.

The amendments relate specifically to regulation 40 of SSCR to ensure it serves its intended purpose by including a new cross-reference.

The rewritten rules outline the following payments which are disregarded as general earnings for the purpose of Class 1A NICs:

• Travel between employments where duties performed abroad;
• Travel costs and expenses where duties performed abroad: earner’s travel;
• Travel costs and expenses where duties performed abroad: visiting spouse’s [civil partner’s] or child’s travel; and
• Foreign accommodation and subsistence costs and expenses (overseas employments).

Regulation 40 of the SSCR provides for agreed general earnings to be excluded from any charge to Class 1A NICs.

This includes certain classes of general earnings that are disregarded in the calculation of earnings for the purposes of Class 1 NICs by Schedule 3 to the SSCR.

For further reference, you can read the full policy paper, titled ‘National Insurance contributions: clarity for employers whose workers perform duties abroad (Class 1A)’ by clicking here.

Last updated: 2nd November 2016