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HMRC internal manual

Employment Status Manual

Basic principles: conditions of liability: liability for NICs - client abroad

Regulation 6(1)(c) SI 2000 No. 727

Section 2(1)(a) Social Security Contributions and Benefits Act 1992

Where the worker provides his services to the client abroad, the intermediaries legislation may not apply for NICs purposes.

The intermediaries legislation only applies, for NICs purposes, where the worker would be regarded for the purposes of Parts I to V of the Social Security Contributions and Benefits Act 1992 as employed in employed earner’s employment by the client, had the arrangements taken the form of a contract between the worker and the client.

The definition of “employed earner” is in section 2(1)(a) of the Social Security Contributions and Benefits Act 1992 (“CBA”) as “a person who is gainfully employed in Great Britain either under a contract of service, or in an office (including elective office) with general earnings”.

Only if the contract between the worker and client would result in the worker being an employed earner under this definition will the intermediaries legislation bite for NICs purposes. 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.

Where the worker provides services to a client;

  • in the European Economic Area (EEA) see ESM8115
  • outside the EEA but in a country with a reciprocal agreement with Great Britain. See ESM8120
  • in the rest of the world, see ESM8125

The tax position is not affected by the location in which the duties are performed.