On 24 July 2014 HMRC published a consultation document regarding the national insurance contribution (NICs) treatment of employment related securities issued to internationally mobile employees (IMEs).

Following the enactment of Finance Act 2014, from 6 April 2015 taxable income arising to IMEs in respect of their employment related securities will be apportioned on a time basis. The taxable income relating to UK duties will be taxed in the UK, with that relating to overseas duties being excluded from UK tax.

Currently, NICs are charged on the full amount of an IME’s taxable income, before UK/non-UK apportionment.

The consultation proposes to align the NICs and income tax treatment of IMEs as much as possible. Full alignment will not be possible, however, due to differences between double tax treaties and their NICs equivalents (social security agreements).

To view the consultation document, click here.