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Foreign Employers and National Insurance Contributions

Currently, employers based outside the UK do not have to make secondary national insurance contributions (NICs) in respect of any of their UK workers.  The Government intends to introduce legislation to reverse this position.  In terms of the recently published draft National Insurance Contributions Bill, non-UK employers will be obliged to pay secondary NICs where their employee lives or works in the UK and is working for a third party which is resident or has a place of business in the UK. 

If the employer is based outside the EEA and fails to pay secondary NICs, liability for the outstanding payment will be transferred to the third party.  In addition, HMRC may decide that the third party should be liable for all future secondary NICs even though the third party is not the employer.  If an intermediary is involved, liability will rest with it rather than the third party.

It is intended that the draft Bill will apply to all offshore workers regardless of whether they work on fixed or floating platforms.  However, the position in respect of seafarers will not be affected.  A foreign employer employing mariners working on vessels operating wholly or mainly outside category A, B, C and D waters will therefore not be liable to pay secondary NICs. 

The Consultation on the draft Bill closes on 8th August 2013.                  

For more information please contact Katie Williams or Nicola Gray on 01224 632 464. 

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