HMRC has released updated guidance on how employers should calculate National Insurance Contributions (NICs) for internationally mobile employees (IMEs), individuals who work partly in the UK and partly overseas.
The clarification confirms that HMRC now favours the ‘apportionment approach’, replacing the previously used ‘all or nothing’ method.
What’s changing?
Under the apportionment approach, employers must allocate earnings; such as salary, bonuses, termination payments, and certain share-based awards, according to the period during which the employee was subject to UK NICs while the award was earned.
This has particular relevance for deferred or performance-linked pay, where income may be earned over several years across different tax jurisdictions.
NIC liability arises when the income is earned but becomes due when it is actually paid. Employers are expected to self-correct historic NIC submissions through the Real Time Information (RTI) payroll system, going back up to six tax years if needed.
What employers need to do
To remain compliant, UK and multinational employers should:
- Review current NIC treatment for internationally mobile employees.
- Identify deferred remuneration and bonuses that may need apportioning.
- Check historic submissions and make corrections via RTI where necessary.
- Update payroll processes and maintain full audit documentation.
- Seek advice for complex or cross-border reward arrangements.
What about share awards?
The new guidance applies to certain share-based awards treated as general earnings, that is, those that do not provide a right to receive securities.
Awards that do provide a right to receive securities remain governed by existing legislation, which already sets out NIC apportionment rules.
How Abbiss Cadres can help
At Abbiss Cadres, our integrated team of legal, tax, and HR specialists helps employers interpret and apply HMRC’s evolving guidance. We advise on the practical implementation of the apportionment approach, review historical NIC exposure, and design compliant payroll and share scheme frameworks.
Whether you’re expanding internationally or managing globally mobile talent, we can help you stay compliant and confident.
The guidance is available in HMRC’s National Insurance Manual (NIM33650).
