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Employer's NI on salary to overseas employee

Is E'r NI payable?

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UK company wants to employ an individual who is resident in another EU country. The new employee had never been in UK and has no intention to move here and all work will be completed by him remotely living permanently at his home country. UK employer does not have a branch/presence in the EU country.

We are happy that the UK co can pay him gross with no tax/E'e NIC deductions and operate NT code.

I cannot however find definite answer if UK employer is liable to pay E'r NIC for this new employee in UK. Could members possibly point me in to right direction where to look?

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By zarar
07th Sep 2019 00:50

Have you checked the rules where the employee lives? They may be required to set up a payroll there

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By psimonparsons
07th Sep 2019 07:20

No. They are not UK resident or working in the UK, so if not liable to Class 1 then not liable to Employee or Employer NICs. Equally the individual would not be reported to HMRC as they are not subject to PAYE and are non-resident with no UK Income.

However, there may be obligations in the country they are resident and working in. They are likely to be subject to Tax and that nations social insurance. There may be a requirement for employer contributions to that social insurance scheme.

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Caroline
By accountantccole
09th Sep 2019 12:26

You definitely need to check local rules, sounds like an overseas payroll to me. Presumably this isn't for someone who is making management decisions on behalf of the company? A director could well give you branch issues.

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