Resident but Not Ordinarily Resident and Domicile for National Insurance
Experienced tax professionals who deal with expatriates will remember the introduction of the statutory residence test with effect from 6 April 2013 and the abolition for tax of the old regime and the concept of being not ordinarily resident.
This concept still pops up for tax as cases relating back to those days are still progressing through the courts, for example, see the case of Kevin McCabe V HMRC .
What is often forgotten is that the concept still applies for National Insurance Contributions albeit in limited circumstances. The following legislative examples refer to ordinary residence:
?· Regulation 145 SSCR 2001 - CASE F- Residence and Persons Abroad
· Regulation 146 SSCR 2001 - CASE F- Residence and Persons Abroad
· Regulation 149 SSCR 2001 – CASE G – Volunteer Development Workers
Isn't it time that this concept was also abolished for NIC?
On 30 October 2024 draft finance bill measures to deal with the non domiciled tax changes and the introduction of the FIG regime were published. These include the draft amendments to the Home Leave provisions in S373 ITEPA 2003 to reduce the period that home leave can be claimed from 5 to 4 years and align with the 4 year FIG period.
The equivalent NIC home leave provisions are in Para 5 of Part VIII of Schedule 3 SSCR 2001 and they like the current tax provisions refer to a non domiciled employee. The following NIC legislative examples also refer to Domicile:
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?????? Regulation 112 SSCR 2001 – modification of employed earner’s employment
?????? Regulation 117 SSCR 2001 – Conditions of domicile or residence
?????? Regulation 145 SSCR 2001 - CASE F- Residence and Persons Abroad
?????? Regulation 146 SSCR 2001 - CASE F- Residence and Persons Abroad
?????? Regulation 146 SSCR 2001 - CASE G – Volunteer Development Workers?
?????? Section 170 SSCBA 1992 – Part XII Statutory Maternity Pay
The amending legislation for NIC has not yet been published.
Many readers will have spotted that I could not have put this article together without contributions (bad pun intended) from my National Insurance colleagues. Any errors and opinions expressed are, however, all mine and my fault alone.