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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Special Class 1A NICs cases: Workers going or coming from abroad who are provided with benefits: Double Taxation Agreements

Section 10(1) SSCBA 1992If a worker coming from or going abroad is subject to UK NICs legislation (see

NIM16403 for more information), the conditions in section 10(1) of the SSCBA 1992, (see NIM13021), must be satisfied for Class 1A NICs liability to arise. One of these conditions is that the benefit must be chargeable to income tax under ITEPA 2003 on an amount of general earnings received by the worker from any employment (before 6 April 2003 – emoluments chargeable to income tax under Schedule E).

To prevent double taxation, the UK has entered into Double Taxation Agreements (DTAs) with many countries. In certain circumstances, one country or the other will

  • give up its claim to tax, or
  • agree to give credit for the tax paid to the other country.Where the UK gives up its claim to tax, no Class 1A NICs are due. Where the UK gives credit for the other country’s tax against the tax due on a benefit chargeable to income tax under ITEPA 2003 (before 6 April 2003 – chargeable to income tax under Schedule E), Class 1A NICs are due on the total amount of general earnings, even though some of the tax may not be payable because of the DTA. That is because the general earnings are chargeable. Chargeable does not mean the same as payable or charged, see

NIM13070. When considering liability for Class 1A NICs, in these circumstances, consider the effect of the relevant DTA on the individual’s UK income tax liabilities.

See EIM40601 for guidance on the application of DTAs to general earnings (before 6 April 2003 – see SE40601)