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Oleochem a UK resident company provided offshore laboratory services to the oil and gas industry.
It had a wholly owned subsidiary I which provided it with process chemists who worked on clients’ floating production storage facilities.
The subsidiary was registered in Jersey in order to avoid secondary Class 1 National Insurance contributions on the basis that it had no UK place of business.
HMRC issued 42 notices of decision that Oleochem was liable to pay secondary Class 1 NI on the earnings of 42 process chemists who were all UK taxpayers.
Oleochem appealed saying that the chemists were employed by I and therefore outside the Social Security (Contributions) Regulations 2001 SI 2001/1004 reg 145(1)(b).
They were furthermore members of the crew and the floating facilities were vessels so the chemists were mariners falling outside the residence test in the 2001 Regulations.
The Special...
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