Employment Tax

Residence and ordinary residence for social security purposes

Produced by Tolley in association with Jim Yuill at The Yuill Consultancy
  • 19 Oct 2021 23:15

The following Employment Tax guidance note Produced by Tolley in association with Jim Yuill at The Yuill Consultancy provides comprehensive and up to date tax information covering:

  • Residence and ordinary residence for social security purposes
  • Residence for social security purposes
  • Ordinary residence

Residence and ordinary residence for social security purposes

Residence for social security purposes

Residence is a concept that has always been interpreted differently for tax and NIC purposes. This is even more so since the introduction of the statutory residence test (SRT) for tax which was introduced in FA 2013, Sch 45 for the tax years 2013/14 onwards.

Residence for social security (NIC) purposes is not defined in legislation, but the dictionary definition states that it is “the act or duration of dwelling in a place”. There does not need to be any permanence in the arrangement and the place of residence can change on a regular basis. What is abundantly clear is that residence for tax and social security purposes can be significantly different. For the purpose of the EU social security regulations, residence means habitual residence which is where an individual will have their strongest personal ties. The word ‘stay’ in the EU provisions is closer to residence.

For a UK NIC liability to arise, there must be employed earners employment in the UK. This indicates that there has to be a presence in the UK that links with SI 2001/1004, reg 145(1)(a), which requires an

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