Employer NI Contributions for overseas staff

Staff member is working fully remote abroad. He has a NT tax code and has written to HMRC enquiring a liability decision on whether he will be exempt from NI contributions as he is a tax resident abroad. How does that work on the employer side? What happens to the employers NI contributions that are derived from employee's salary?Are those being waived with the liability decision or do they still need to be pais regardles of where the emloyee is based/taxed? Many Thanks

Hi Ankah93 Anker,
I can confirm that the outcome of the liability decision will apply to both employee and employer National Insurance contributions (NICs).
If the decision is that the employee is not liable to UK NICs, the employer will be notified and advised to cease deducting NICs and to process a refund of any NICs paid after the liability ceased. If the decision is that the employee is liable to UK NICs, the employer will continue to deduct employee and employer NICs as normal.
Thank you.

I have a similar situation to this and want to know more. If the decision means the employee is not liable will the employer need to use the NX NIC code in order to not make any deductions? Similarly, if the decision finds the employee/employer are still liable for NIC contributions, will the employee be able to get a certificate showing proof of liability? This particular employee would be tax resident in Canada (living there) but working for a UK company on UK payroll/employment contract. Thanks.

Hi, a UK tax resident entitled to maternity leave is going to spend their leave period (9-12 months) in Spain. It’s clear a P85 is required to let HMRC know they are leaving upon which no more income tax will be dedicated from payroll (SMP + employer top up). What would be the process to follow regarding NI contributions? would these need to be paid in the UK and therefore excempted from contributions in the UK. Or would UK deductions stop and contributions would have to be made in Spain? If the latter is the employee responsibility to do this?

Hi BritAbroadTax,
I am not aware of the similar situation you are referring to.
We would need more information before we can advise you on your payroll responsibilities, i.e whether the individual is a UK national, have lived in the UK previously etc.
Please see our CWG2 booklet  - CWG2: further guide to PAYE and National Insurance contributions - section 4.6 onwards offers more info on employees working in and out of the UK. Alternatively you can call us on 0300 200 3200 to discuss your scenario further and we can advise accordingly. 
Thank you.
 

We also have an employee that will be working fully remote abroad (Canada). They will apply for an NT tax code and will write to HMRC to get a liability decision on whether they will be exempt from NI contributions as they are tax resident in Canada. We have no presence/establishment in Canada but plan to keep paying/employing them through UK employe/PAYE. The employee is a UK citizen (has Canadian permanent residency also) and has worked with the company for several years in the UK. They are deciding to move themselves, but with our agreement. Reading the National Insurance Guidelines (NIM33425 - https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim33425) would suggest they are still liable for UK NIC's if the employee is "posted" for no longer than 5 years and a certificate can be applied for. We would still seek a liability decision from HMRC to be sure. Does this seem like a correct approach? If this decision came back as they are not liable for NI contributions in the UK, we would then not make deductions and it would be the employees responsibility to pay the relevant authorities in Canada is our understanding. Thanks in advance - your replies have been really helpful.

Hi ,
 

If the employee has not provided you with an A1 certificate then NIC would be due as normal. Thank you

Hi ,
 

You would operate payroll as normal until your are given paperwork to tell you otherwise. It is correct if you have any concerns to contact the National Insurance helpline and ask to speak to an international caseworker on 0300 200 3500. Thank you .

Hi, I'm planning on moving to Argentina with my family, but staying under UK employment. Argentina and UK dont have a NI agreement. I understand that if I'm no longer a Ordinarily resident, I wont need to make NI contributions in UK during the first year. I dont believe I will be a Ordinarily resident any more, but how do I prove it with HMRC? What steps should I take?

Hi NK23456,
There is liability for class 1 National Insurance contributions for the first 52 weeks of employment overseas when the following conditions are satisfied:
-    The employer has a place of business and
-    The employee was resident in the United Kingdom before their overseas employment began and
-    They are Ordinarily Resident in the United Kingdom for National Insurance purposes
If you are not Ordinarily Resident in the UK then your employer will not deduct class 1 National Insurance contributions from your salary and you may then wish to pay voluntary contributions to maintain your entitlement to the UK State Pension.  Full details are given in our leaflet NI38 ‘Social Security Abroad’ which is available via Social Security abroad: NI38.
Thank you.