AmazonH

Thursday, February 19, 2009

Claim back National Insurance for foreign students not residents of UK !!!

Can I claim back National Insurance if I am not a resident of UK and have just done an internship there for two months ?

This was the question facing me as i had done a two month internship with Morgan Stanley in 2008. I looked up the net & HMRC website. As usual they are all very confusing - but i understood the following

For income tax

a. You dont need to pay income tax if your total pay for the period of the internship is going to be less than the limit for personal allowance. This figure is 6035 pounds for 2008-09. You need to fill a P38(s) & submit to your employer so that they wont deduct tax while making your salary payments.

b. If your pay is going to be higher than this you need to pay tax @20 % on amount higher than 6035 upto 34800.


For National Insurance

a. You need to pay NI contribution compulsorily if your weekly income is more than 105 pounds.

b. Thus whether you income tax or not, you are most likely to pay National insurance


Now this was a big issue as a lot of my income was becoming taxable in form of NI & Income tax. Further, I could claim a part of my IT, but with NI I was stuck because of this & I wouldnt even use NI for any purpose cause I wont be living in UK in my life (as of now).

But then I found this page - have a look

http://www.hmrc.gov.uk/nic/work/ni-uk.htm#c3

Specifically this section -
--------------------------------------------------------------------------------------

Coming to the UK - Employees not from the European Economic Area, Switzerland or Social Security Agreement Countries

Employees

The basic rule is that anyone coming to the UK to work is required to register for a National Insurance number and pay contributions from the outset. If you are not covered by one of the agreements with European Economic Area countries, Switzerland or Social Security Agreement Countries there are certain exemptions:

Foreign employer sending employee to UK

NICs are not payable for the first 52 weeks starting from the first Sunday after the employee arrives in the UK for an employee:

Students

NICs are not payable for the first 52 weeks starting from the first Sunday after the employee arrives in the UK for an employee who is a student studying full-time outside the UK if:

Apprentices

NICs are not payable for the first 52 weeks starting from the first Sunday after the employee arrives in the UK for an employee who is employed outside the UK in a role similar to an apprentice, if

When the 52 week period finishes, the normal rules about working out, paying and recording NICs apply.

-------------------------------------------------------------------------------------

I have marked the relevant portion in red. What this means is that students like me who did there internship during their first & second year of studies can reclaim national insurance paid out. Further, if you are going to do such an internship, tell your company at the starting that they should not deduct NI contributions from your pay.


I am applying for a refund. Lets see.


:)



1 comment:

  1. This comment has been removed by a blog administrator.

    ReplyDelete

AmazonH