National Insurance Question

GregH

My girlfriend has worked on cruise ships for the last 3 years.

The first 12 months was for an American company, onboard a bahamas registered ship.

The past 2 years she has worked for a British company, on a UK registered ship.

She has paid no income tax or national insurance during this time.

She has now been told that she will have to start paying class 1 national insurance from beginning of January and that she may have to pay for the entire time she has been at sea.

From the brief research i have done on HMRC website, i can see that she has been liable from the time she started working on the British registered ship. Can the HMRC ask for the missing payments?

Any further help on this matter would be much appriciated!

Hoddie_2

The short answer is 'probably yes'.

However, Income Tax and Class 1 National Insurance should be deducted by the employer (or agent) at source.

Your girlfriend might be able to argue against paying by claiming it was reasonable to assume that her employer would be aware of the UK regulations regarding Income Tax and National Insurance, and that she assumed the lack of deductions was correct due to the nature of the employment (I'm assuming she worked overseas).

HMRC would likely counter-argue that it was not reasonable for your girlfriend to assume that her income would not be subject to tax, whether in the UK or another jurisdiction.

It's unlikely they will write off any underpayment but there may be a chance you'll be able to make tham agree that the employer should pay instead of your girlfriend.

You should seek professional advice before before submitting such a defence.