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Class 4 NIC - Overseas self employment

A client of mine has just returned from 9 months in Australia. Whilst he was there he undertook self employment and I am now completing his self assessment tax return. Due to the short duration of his visit overseas he has remained a uk resident throughout. Clearly he is liabie to tax in the UK, but what about Class 4 NIC? The self employment only took place in Australia - he was an employee before he left the UK and upon his return - no element of his self employment took place within the UK.

Appreciate any answers

Thanks

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01st Nov 2010 15:55

Liable to Class 4

The liability to Class 4 NIC is not dependent on being classified as self-employed in the UK - they are payable in respect of the profits arising from a trade which are chargeable to UK income tax.  So, even though the self-employment was in Australia, Class 4 NICs are payable because the profits of the trade are taxable in the UK.

If your client needs to top up his NI contributions to achieve a qualifying year for state pension purposes, he might also wish to pay Class 2 NICs voluntarily.

 

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By Coops
01st Nov 2013 15:11

Class 4 NIC on overseas trades

Just looking at a similar issue, and section 15(1)(c) SSCBA 1992 excludes profits of a trade, profession or vocation carried on wholly outside the UK.

From this, it appears that the Australian self-employment may not be subject to class 4 NICs.

 

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