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Changes to Social Security Rules in the EU

In June 2009, the UK tax authority, HMRC, confirmed changes to the rules governing payments of employers National Insurance payments that come into force from the 1st May 2010.

In principal the changes mean that in the case of a UK registered vessel, if the crews are employed by a company with a place of business in an EU country, then in addition to the employee NI payments having to be made, an employer’s liability, currently 12.8% of the gross salary will also have to be charged.

The good news is that as long as the employer is outside the EU then the employer share of the contribution will not be payable.  Therefore the employment of crews through ju­ris­dic­tions such as Guernsey will continue operate under the current HMRC guidelines and not be required to make these payments.

It was also confirmed that where we have a non-UK registered vessel the current rules will continue to apply and whether there is an employee contribution liability will depend on whether the contract of employment was entered into in the UK.

HMRC also confirmed that where they are taking the power to pursue NIC liabilities across borders this will only apply to contri­buti­ons due from when the new legislation comes into force.

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