§ Mr. George HowarthTo ask the Chancellor of the Exchequer what is his policy towards British subjects working on contracts in the middle east for United Kingdom companies whose salary is administered in Britain for income tax and national insurance contributions.
§ Mr. DorrellThe tax treatment of United Kingdom citizens working abroad for United Kingdom companies, whether in the middle east or elsewhere, depends on a number of factors, including their residence status for United Kingdom tax purposes; and the terms of any relevant double taxation agreements and the length of time they spend outside the United Kingdom.
15WI am advised by my right hon. Friend the Secretary of State for Social Security that, where individuals remain ordinarily resident in the United Kingdom while working abroad, they and the United Kingdom companies to which they are contracted are liable to pay class 1 national insurance contributions for the first 52 weeks of employment in most middle eastern countries. Contributions may be paid voluntarily by the individual after that time.
Israel is the only middle eastern country with which the United Kingdom has a social security convention. Under the terms of that convention, class 1 contributions may be due for the first five years of employment there. Liability would arise under Israeli national insurance law if the employment lasted for longer than five years.