National Insurance Contributions when Living Abroad

If you’re going to work overseas do you have to continue to make national insurance contributions when living abroad?  If not, should you volunteer to make them anyway?  These are simple enough questions, surely?  But ones not so simple to answer!

This is a guide to the rules relating to UK national insurance contributions for British expatriates working abroad and also information about when you can and should volunteer to continues to make contributions.

The first and most important point to make is that the rules relating to who has to pay national insurance contributions once they’ve expatriated differ depending on the country the individual is moving to and also how long they intend living abroad.

If you’re based in the UK currently, pay British taxes and work for a British employer and they decide to relocated you to live and work abroad for less than twelve months in a country within the European Economic Area then British national insurance contributions will continue to be paid for you and you will not have an obligation to make any form of social security type contribution in your overseas country of temporary residence.

If at some point during your relocation period your employer decides to extend your overseas contract then UK contributions can be made for another twelve months…some countries allow for this renewal to reoccur for a maximum duration of five consecutive years.

If you’re being relocated and from the outset it is determined that you will be working in a European Economic Area nation for more than twelve months then the national insurance contribution equivalents will have to be paid in the overseas nation but they will count towards your maximum contributions in the UK.  Just make sure you keep records of all payment made…

If you’re relocating to take up a job for a foreign employer in a country within the European Economic Area for any duration, then naturally enough contributions will have to be made in the foreign country in which you will be living and working but you can also choose to make voluntary national insurance contributions in the UK as well if you want to secure your long term pension rights for example.

Britain has mutual agreements in place with a number of non-European countries such as America, Canada and even Turkey relating to the payments of social security contributions whereby a UK national residing in a country with which the UK has an agreement in place can opt to make UK based national insurance payments instead of the equivalent social security payment of the nation in which they are working.

Finally, a UK citizen employed by a UK based business who is relocated by his British company to work abroad in a non-European Economic Area nation nor a nation with which the UK has a bilateral social security payment agreement in place will have to continue to make UK NI contributions for the first fifty two weeks of his overseas assignment after which time he can desist.  Please note that even during this payment period such an individual may be liable to make NI equivalent contributions overseas.

As each individual’s circumstances are unique it is often the case that personal advice is required and in fairness to HM Revenue and Customs they are actually very helpful if you contact them directly (we know, we tried it!)…you can telephone them on +44-191-2037010 or fax them at +44-191-2257800 or try visiting their website as your first port of call as it contains a wealth of useful information.

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