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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17117
Experience:  International tax
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If a non eu, foreign person is employed by a UK ltd company

Customer Question

If a non eu, foreign person is employed by a UK ltd company to work abroad and never comes to the uk, I understand as long as the person satisfies the criteria to be a Non UK Resident and Non Domicile, they do not have to pay UK Tax or NI on their income. However does the employer (ltd company) have to pay employers NI for that employee? Or if I get the foreign person to set up as a ltd company in their country (dubai) and invoice me for client introduction work, which is carried out abroad and the company has no agent premises or business in uk would this foreign company have to pay uk tax?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Thank you for your question. As the rules have been changing over the past few years it is important to know how this applies.
If you work in another EEA country or Switzerland for an EEA or Swiss employer (this includes a UK employer), you are usually insured under the social security laws of the country you work in. You will not usually have to pay UK National Insurance contributions.
Liability for Class 1 National Insurance contributions occurs if a person works:
in the UK under a contract of service
or in an office with income taxable as employment income
If the worker is not in the UK and the work is not performed in the UK then NI would not apply especially as they are not in another EU country.
Customer: replied 3 years ago.

Hi, but my question is... as the worker is non eu and working in a non eu country (dubai) is the employer liable for employers NIC as the employer is a uk employer?

Expert:  TaxRobin replied 3 years ago.
The use of a foreign employer agent would absolve your company from any responsibility for reporting the person as an employee.
Usually there is liability to pay National Insurance contributions as soon as an employee starts work in the UK as this employee is not working in the UK there would be no payment regardless.
Expert:  TaxRobin replied 3 years ago.
Customer Last Viewed on 17/07/2014 at 08:26
I hope you understood the above response to your request for clarification.