Working outside the European Economic Area, Switzerland or Social Security Agreement Countries

Employees

When you must pay Class 1 NICs contributions

When you are employed abroad outside the European Economic Area, Switzerland or Social Security Agreement Countries, Class 1 NICs contributions must be paid for the first 52 weeks you are there, if you meet the following conditions:

  • your employer has a place of business in the UK, and
  • you are ordinarily resident in the UK, and
  • immediately before starting the employment abroad you were resident in the UK.

Ordinarily resident

You are ordinarily resident in the UK for National Insurance purposes if you:

  • normally live there, apart from temporary or occasional absences, and
  • have a settled and regular mode of life there.

You may be ordinarily resident in:

  • a place from which you are temporarily absent, or
  • two places at once, in some circumstances.

We weigh a number of factors to decide where you are ordinarily resident for National Insurance purposes.

Factor Indication of your residence position
You return to the UK from time to time during the period of employment abroad. Continued ordinarily residence. The more frequent or the longer the returns, the stronger the indication that you are ordinarily resident.
Visits to your family who have remained at your home in the UK, or holidays spent at your home in the UK. Ordinarily resident.
Visits in connection with the overseas work, e.g. for briefing or training or to make a report. Not such a strong indication that you are ordinarily resident.
Partner and/or children are with you during your overseas employment. Not ordinarily resident, especially, if you do not retain a home in the UK or only make occasional visits to the UK.
You maintain a home in the UK during your absence. Ordinarily resident.
Your home in the UK is available for your use on your return. Ordinarily resident, but if your house has been rented on a long let it is not a strong indication of ordinarily residence.
You have lived in the UK for a substantial period. The longer the period, the stronger the indication that you are ordinarily resident despite the period of employment abroad.
You will return to the UK at the end of your employment abroad. The earlier the return, the stronger the indication that you are ordinarily resident.

For help in deciding whether you are ordinarily resident in the UK you can contact HMRC Residency (Newcastle).

Self Employed

If you go abroad to work on a self employed basis outside the European Economic Area, Switzerland or Social Security Agreement Countries, you are no longer required to pay Class 2 National Insurance for those weeks.

You can choose to protect your future Social Security benefit entitlement by continuing to pay Class 2 NICs if you are employed or self-employed abroad and if you satisfy the following conditions:

  • you have lived in the UK for a continuous three year period at any time before the period for which NI contributions are to be paid. (If you have lived or worked in another EEA country or in Turkey, time spent there may help you to meet this condition), or
  • before going abroad you paid a set amount in NI contributions for three years or more (this will be checked when you ask to pay Class 2 NICs), and
  • you were an employed or self-employed earner immediately before you went abroad, or
  • you would normally be employed or self-employed, but were unemployed immediately before you went abroad.

For help in deciding whether you can pay Class 2 NICs, contact HMRC Residency (Newcastle).

Where you remain resident in the UK for tax purposes, you will be required to pay Class 4 contributions based on your UK taxable business profits for that year.