Calculating National Insurance Contributions

The rules for National Insurance contributions depend on which country your employee is going to work in. Due to coronavirus, HMRC has agreed to allow an easement for employees temporarily returning to work in the UK from a country outside the EU, EEA or Switzerland where the UK does not have a reciprocal agreement.

Employees temporarily returning to work in the UK due to coronavirus

Where an employee returns to the UK to work on a temporary basis the situation will depend on the nature of the duties being carried out.

If the duties are incidental to the overseas employment such as a briefing or further training for that employment then treat the employee as still abroad. You should continue to deduct Class 1 contributions until the 52 week period of Class 1 liability is met.

If the duties are not incidental to the overseas employment and the 52 week period of liability has ended, you can:

Disregard the first 6 weeks of employment in the UK. This is not a legal requirement but a concession to ease administration when an employee briefly returns to the UK - it only applies where they return to the UK for the same employer.
Pay contributions in the normal way for any further period in the UK.

Where the 52 week period has not ended, it is not extended by any period of employment in the UK which falls within it.

If the employee goes to work abroad again once it is safe to do so and any existing liability period has ended, Class 1 National Insurance contributions will continue to be paid for 52 weeks starting from the contribution week in which the overseas employment begins.

A further period of liability will arise only if:

The employer has a place of business in UK.
The employee is ordinarily resident in UK.
Immediately before the start of the employment the employee was resident in the UK.

For employees working in an EU, EEA country or Switzerland due to coronavirus, social security contributions or UK National Insurance should continue to be paid as usual, unless you’re advised otherwise. Please note that that majority of countries covered by the EU Social Security Regulations are now advising that A1 certificates must be obtained after an initial relaxation of this obligation. For those working in a country where a reciprocal agreement is in place, advice should be sought on the correct course of action.

Andrew Bailey
andrew.bailey@bdo.co.uk