Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Status Manual

From
HM Revenue & Customs
Updated
, see all updates

Conditions of Liability: liability for NICs - client in European Economic Area

Council Regulation (EEC) 1408/71: Article 13.2(a), 14.1(a)(b) and 14.2(b)

Where the worker provides his services to a client abroad, the intermediaries legislation may not apply for NICs purposes (see ESM3130). However, where the duties are to be performed abroad with an overseas client there are exceptions to this general rule, depending on where the client is based.

Any person employed in the territory of one Member State of the Economic European Area (EEA) is subject to the legislation of that state even if he resides in the territory of another state or the registered office or place of business is situated in the territory of another state.

EEC 1408/71: Article 13.2(a)

Example

A contract involving a worker living in the United Kingdom and a French client, under which he works in France would mean he would be liable to pay French social security contributions. He would not be an employed earner for the purposes of United Kingdom national insurance legislation. Therefore the intermediaries legislation will not apply.

EEC 1408/71; Article 14.1(a)

There is an exception to Article 13. This Article allows for a person to continue to pay United Kingdom NICs where they are working for a United Kingdom employer who posts them overseas to work in any country in the EEA for not more than 12 months. The employer obtains form E101 from NICO International Services. Under certain circumstances the 12 month period may be extended for a further 12 months and an E102 obtained.

The intermediary can obtain form E101 from NICO International Services and the worker is classed as a posted worker. He would be regarded as an employed earner for the purposes of the United Kingdom national insurance legislation by reason of the contractual arrangement between the intermediary, the worker and the client. However, the intermediaries legislation does not apply, for NICs purposes, because in deciding whether the legislation applies you consider what the situation would have been if the intermediary had not been involved.

EEC 1408/71; Article 14.2(b)

A further exception is where a person is employed in two or more Member States. If so, they are subject to the legislation of the Member State in which they reside.

Example

A contract between a worker living in the United Kingdom and a client in France to work in both in the United Kingdom and France will mean he is still liable to pay UK contributions. He would be an employed earner for the purposes of United Kingdom national insurance legislation and the intermediaries legislation may apply.