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UK National Insurance on overseas self employment

Is UK National Insurance chargeable on overseas self employment?

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I have a client who although resident in the UK for tax purposes for 2019/20 carried out self employed work in Canada for the early part of that tax year - up to June 2019.  He then returned to the UK and worked on a self employed basis until September before becoming employed for the second half of the tax year.

The self employed earnings are such that both Class 2 and Class 4 NIC is payable.

My question is whether the NIC is payable on the total profit, or whether I am able to exclude the Canadian portion of the profit, with the liability only arising on the UK element?

Many thanks for any help with this. 

Replies (6)

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By Ranse
25th Nov 2020 12:29

if he is resident and domicile in UK - he is taxed on both Uk and worldwide income.

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Replying to Ranse:
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By stephenpotter
25th Nov 2020 13:54

My apologies, I think I may have confused the issue here.

I am happy that the full sum is liable to income tax, what I was unsure of was whether the same rules applied for NIC - in particular is class 4 NIC due on the whole profit, even when part of that profit arose from self employed work carried out in Canada?

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By jonharris999
25th Nov 2020 12:56

You're losing me when you make a distinction between:

"The self employed earnings are such that both Class 2 and Class 4 NIC is payable."

and

"exclude the Canadian portion of the profit"

If you are discussing profits from a Canadian business on which Canadian tax might be due (and might have a Foreign Tax credit creditable in the UK), then Class 2 and 4 wouldn't be due. If on the other hand these are profits from a UK business then I doubt that (without checking the DTT) Canadian tax is due.

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By stephenpotter
25th Nov 2020 13:55

My apologies, I think I may have confused the issue here.

I am happy that the full sum is liable to income tax, what I was unsure of was whether the same rules applied for NIC - in particular is class 4 NIC due on the whole profit, even when part of that profit arose from self employed work carried out in Canada?

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Replying to stephenpotter:
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By jonharris999
25th Nov 2020 14:17

If a self-employed UK resident conducted some of their UK self-employment business overseas, then provided there is no contradiction in the DTT (and I'm not over-familiar with Canada) they owe tax and Classes 2 & 4 in the UK.

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Replying to stephenpotter:
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By jonharris999
25th Nov 2020 14:17

If a self-employed UK resident conducted some of their UK self-employment business overseas, then provided there is no contradiction in the DTT (and I'm not over-familiar with Canada) they owe tax and Classes 2 & 4 in the UK.

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