NIM33520 - special cases: international - people going to or coming from abroad: row: exemption example

Regulation 145(2) of the Social Security (Contributions) Regulations 2001

Example 1 – The Class 1 National Insurance contributions (NICs) exemption does apply

An Australian employer assigns Angus, who normally resides and works in Australia, to the UK for 2 years.

Angus is not ordinarily resident in the UK and he is not ordinarily employed in the UK, he is working for his overseas employer and is in the UK in continuance of that employment. He meets the criteria for a 52 weeks exemption from NICs. His Australian employer has no place of business in the UK. Once the first 52 weeks period in Regulation 145(2) SSCR 2001 has expired, Angus will become liable for contributions in the UK.

When he is in the UK, Angus is in employed earner’s employment and meets the residence criteria in Regulation 145 (1) SSCR 2001 because he is present in the UK at the time of his employment.

However, his employer has no residence, presence or place of business in the UK and does not satisfy the conditions in regulation 145(1)(b) SSCR 2001, and therefore is not liable to pay secondary Class 1 contributions.

Example 2 – The Class 1 NICs exemption does not apply

Sergei is a Russian National and a doctor who has moved from Russia to the UK to take up a post in the NHS. His overseas contract with the Russian Health Service has ended. He is now employed in the UK for an employer with a place of business in the UK.

Sergei is now ordinarily resident, present and employed in the UK.

Class 1 National Insurance contributions (NICs) will be due in the UK on his earnings from the NHS. This is because the exemption for the first 52 weeks in regulation 145(2) of the Social Security (Contributions) Regulations 2001 only applies to an employee who is not ordinarily resident or employed in the UK by an employer whose place of business is outside the UK.