The following Employment Tax guidance note by Tolley in association with Jim Yuill at The Yuill Consultancy provides comprehensive and up to date tax information covering:
Class 1 contributions arepayable on earnings paid to an employed worker which derive from or aretreated as deriving from employed earner’s employment in the UK. There aretwo kinds of Class 1 contribution, primary contributions for which the employee is liable and secondary contributions which arepayable by a ‘secondary contributor’. The secondary contributor is usually the employer, but in some cases as set out below may be another party.
For a primary liability to arise, the employed earner must be resident or present in the UK at the time of the employment, or ordinarily resident in the UK at that time. The fact that presence in the UK is sufficient to create a contribution liability means that unless an exemption applies, employment in the UK for however short a time will create a contribution liability.
Employment in an EU country or in a country with which the UK has a bilateral social security agreement will often require NIC liabilities to continue. In such circumstances, an individual is treated as being resident in the UK.
For a secondary liability to arise, the person who would be the secondary contributor must be resident or present in the UK when such contributions become payable, or has a place of business in the UK at that time.
Where an employee is posted to the UK by his home country employer, and by virtue of a social security agreement, he remains in his home country contribution system, there areno UK NIC liabilities to consider. The same applies where an employee is posted from a non-agreement country, is not ordinarily resident in the UK and has not yet been in the UK for 52 weeks.
Where there is a UK NIC liability in addition to UK domestic law, certain EU provisions may also be relevant.
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