PAYE operation: international employments: offshore employment intermediaries
Offshore employment intermediaries PAYE and NICs
At Budget 2013, the Government announced proposals to legislate to ensure the correct income tax and National Insurance Contributions (NIC) are paid where there is an offshore employment intermediary.
HMRC has published draft legislation on the Treasury website. Subject to the legislation receiving parliamentary approval and Royal Assent it would come into force in relation to payments made on or after 6 April 2014.
Key features of the new measures include
UK Continental Shelf
The measure includes special rules for where a person is employed on the UK Continental Shelf in the oil and gas industry by or through an offshore intermediary. For example:
An associate company of the offshore employer is first made responsible for operating PAYE and NICs.
If there is no onshore associate company then the licensee is made responsible for operating PAYE and NICs.
If the offshore employer is correctly meeting all PAYE and NICs obligations on behalf of the licensee, then HMRC will issue a certificate exempting the licensee from their PAYE and NICs obligations. As long as this certificate is in force, the licensee cannot be pursued for any PAYE or NICs obligations.
The measure implements new rules where a worker is employed by or through an offshore intermediary:
Where there is a UK agency in the contractual chain, the UK agency is responsible for operating PAYE and NICs.
Where there is no UK agency in the contractual chain, the client the employed person works for is responsible for operating PAYE and NICs.