Particular NIC points

By Tolley

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Particular NIC points
  • Office-holders
  • The normal position
  • National Insurance deeming rules
  • How the deeming provisions affect IR35
  • Cross-border workers

This note sets out the key differences between the tax rules for IR35 and those for NICs.

For an outline of IR35, see the Personal service companies overview guidance note. For the rules, see the Anti-avoidance rules: “IR35” guidance note. For the calculation methodology, see the Calculating the deemed employment payment guidance note.


The tax rules for IR35 were extended to include office-holders for 2013/14 onwards but HMRC’s view is that no separate NIC legislation was required to apply Class 1 NIC to the deemed employment payment in the case of office-holders. There is legislation on the definition of office-holders for the purposes of Class 1 NIC included in the National Insurance Contributions Act 2014 (subscription sensitive), but this is only a clarification about the definition of ‘employed earner’ in the case of office-holders generally. Both tax and NICs can apply to office-holders caught by IR35 following the Finance Act 2013 extension.

The normal position

Separate IR35 legislation exists for tax and NIC. In most cases both sets of legislation produce the same outcome, so that an engagement will either be within IR35, and thus liable for both IR35 tax and NIC, or outside, and liable for neither. However, this is not always the case.

The NIC deeming rules means that individuals in certain types of

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