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The new tax and National Insurance (NI) rules on offshore employment intermediaries will take effect from 6 April.
With regard to offshore intermediaries:
The new tax and National Insurance (NI) rules on offshore employment intermediaries will take effect from 6 April.
With regard to offshore intermediaries:
- where there is a UK agency in the contractual chain, the UK agency is responsible for operating PAYE and NI;
- if there is more than one UK agency in the contractual chain, the UK agency that contracts with the end client is responsible for operating PAYE and NI;
- where there is no UK agency in the contractual chain, the client the employed person works for is responsible for operating PAYE and NI; and
- a special rule applies the secondary NI obligation to a UK agency that is involved in supplying workers overseas, where the worker is in class 1 NI when working abroad.
The new legislation also simplifies the agency rules so that a worker is subject to class 1 NI and PAYE when they work through an agency and:
- the worker is personally involved in the provision of services, to the client; and
- there is a contract between client and an agency under or in consequence of which the services are provided or the client provides consideration for the services, and remuneration is receivable by the worker
The agency worker rule does not apply to workers for whom it can be shown that the worker is not subject to (or the right of) supervision, direction or control by any person.
Special rules have been introduced where a person is employed on the UK continental shelf in the oil and gas industry by or through an offshore employer:
- where the offshore employer has an onshore associate company, the associate is responsible for operating PAYE and NI, including secondary NI;
- if there is no onshore associate company, the licensee of the oil and gas field is made responsible for operating PAYE and NI, including secondary NI; and
- a certification system is being introduced, under which, the licensee can be exempt, if HMRC issue a certificate, showing that the offshore employer is meeting all the PAYE and NI obligations.
When the tax department issues a certificate to an offshore employer, it will also issue a certificate to the oil field licensee. As long as that certificate is not withdrawn by the Revenue, the licensee is not liable for PAYE.
