NIM12013 | Class 1: Calculating Class 1 NICs for Directors: Miscellaneous: Concession for non-resident Directors

Section 3 & Section 6 Social Security Contributions and Benefits Act 1992

As an administrative concession, a non-resident director will have no liability to Class 1 NICs on earnings received from a company registered in Great Britain or Northern Ireland (the United Kingdom) if:

• the director comes from a country which does not have a social security agreement with the UK; and

• the only work the director does in the UK is to attend board meetings; and -

  • they attend no more than 10 board meetings in a tax year, and each visit to the UK lasts no more than 2 nights at a time; or

  • they only attend 1 board meeting in a tax year, and the visit to the UK lasts no more than 2 weeks.

A director would not be covered by the concession if, for example, they attended 11 board meetings in the tax year, even though the visits might only last 1 night each. Time spent visiting the UK should not be averaged to enable the concession, because the requirement is that each visit lasts no more than 2 nights.

Similarly the earnings would not be exempted from Class 1 if there was, say, only 1 meeting attended and the visit to the UK lasted 3 weeks.

The concession is calculated against attendance over the tax year, as opposed to the calendar year or trading period of the business. It remains the same for all non-resident directors and is not increased or multiplied if the individual has more than one directorship.

If the director is within scope of a social security agreement that the UK has with another country or countries (NIM33001 or NIM33014), the concession will not apply.