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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Special cases: Volunteer Development Workers: Certain volunteer development workers to be self-employed

Regulation 150 Social Security (Contributions) Regulations 2001

A volunteer development worker who is employed under a contract of service but

  • no Class 1 NICs are payable on earnings under that contract; or
  • from 6 April 2000, no Class 1 NICs are treated as paid on earnings under that contract by virtue of section 6A Social Security Contributions and Benefits Act 1992 (notional payment of primary Class 1 NICs where the amount of earnings equals or exceeds the relevant lower earnings limit but does not exceed the relevant primary earnings threshold; see NIM01007 for further details),

is regarded as a self-employed earner, even though they are not employed in GreatBritain or Northern Ireland.

As to the first bullet, the circumstances in which no Class 1 NICs are payable include

  • the employer has a place of business in Great Britain or Northern Ireland but the amount of earnings is below the relevant lower earnings limit; or
  • the employer has a place of business in Great Britain or Northern Ireland but the volunteer development worker has already paid Class 1 NICs for the first 52 weeks of their employment abroad (see NIM33026); or
  • the employer has no place of business in Great Britain.

Where Class 1 NICs are payable, or treated as paid, it will usually be unnecessary fora volunteer development worker to pay also the special rate of Class 2 NIC for the sameperiod or year. This is because the amount of earnings on which the Class 1 NICs have beenpaid will usually be sufficient for the year to count for benefit and/or pension purposes.

But where the amount of those Class 1 earnings, either paid or treated as paid, is notenough to make the year a qualifying one, then a volunteer development worker might wantto pay the special rate of Class 2 NIC in order to make the year(s) qualifying.