Dear 222 News viewers, sponsored by smileband,
Indian Workers Will Not Pay UK National Insurance for First Three Years Under New Trade Deal”: What’s Actually Happening.
The UK and India have now concluded a long-awaited trade deal that includes a key clause on social security contributions — effectively allowing certain Indian workers seconded to the UK to avoid paying UK national insurance contributions (NICs) for up to three years.
The Deal in Brief
Under the agreement, the UK and India have negotiated a so-called Double Contributions Convention (DCC) which means that temporary “detached” workers sent by an India-based employer to the UK (and likewise UK-based workers sent to India) will pay social security contributions in their home country rather than both countries simultaneously.
For Indian nationals posted to the UK for up to 36 months and still employed by the India-based employer (i.e., a “detached worker”), the requirement to pay UK NICs is waived — instead they remain contributing into the Indian social security system (Employees’ Provident Fund… etc).
Why It Matters
This clause has sparked a political storm in the UK. Critics argue that:
• It creates a “two-tier tax system” by giving Indian workers in the UK a tax (NIC) exemption that UK workers do not get.
• It could make it financially cheaper for UK employers to hire seconded Indian workers (because their employer/employee do not pay UK NICs) which could undercut UK workers.
• It might cost the UK Treasury significant revenue: some estimates suggest up to £100-£200 million per year in lost NIC receipts.
On the other hand, proponents argue:
• The arrangement is reciprocal: UK-based workers posted to India will benefit similarly.
• The purpose is to prevent “double contributions” (i.e., paying into both country systems) which can discourage cross-border movement of labour and hurt bilateral trade and investment.
• It covers a narrow category of worker (temporary intra-company transferees), not all migrant workers or all Indian nationals working in the UK.
What the Government Says
The UK government states that the DCC and NIC exemption do not apply to the general migrant workforce or to cases where a worker is intending to stay over 36 months or permanently in the UK. In those cases, UK NICs would still apply as usual.
The Trade Secretary also emphasised the exemption is not intended to undermine UK workers, and that such conventions exist with around 50 other countries already.
Key Details & Conditions
• The exemption applies for up to 36 months (3 years) for eligible “detached workers” employed by an Indian employer and seconded to the UK.
• The worker must be employed by the Indian firm, and continue to pay into the Indian social security scheme rather than the UK system.
• The worker remains liable for UK income tax (if working in the UK), and pays the Immigration Health Surcharge if applicable—so this is not a full tax/charge waiver.
• If a worker is intending to stay beyond 36 months, or join a UK-based employer permanently, the UK NIC rules kick in.
Implications & Controversies
Revenue Impact: The Treasury internal estimates suggest a potential cost to the UK Exchequer of tens or hundreds of millions of pounds per year.
Labour Market / Employer Impact: Some fear this may give Indian firms an advantage when deploying workers to the UK (cheaper cost structure), though government says the effect is limited.
Political Reaction: The deal has triggered opposition criticism that UK workers are being disadvantaged, and that the government is giving tax relief to foreign-based workers while UK nationals face higher NICs.
Scope: It is important to underscore that this is not a universal exemption for all Indians working in the UK. It is narrowly targeted. Nevertheless, the perception matters in public debate.
What This Means for Indian Workers & Employers
For Indian firms sending staff to the UK under the intra-company transfer route:
• They may save employee & employer NIC costs in the UK for up to 3 years.
• They must ensure the employee remains on the Indian employer’s books, and remains covered by the Indian social security scheme.
• The employee still needs to meet UK visa/sponsorship rules, salary thresholds, and pay any required immigration health surcharge.
• When the 3-year period ends (or if the conditions of “detached worker” cease), the NIC liability may arise.
What This Means for UK Workers & Firms
For UK-based firms and UK-based workers, the deal raises questions:
• Will UK firms face competition from Indian firms with lower labour cost burdens? Possibly – though the government argues the workforce impacted is small.
• Will UK nationals seconded to India benefit? Yes, under the reciprocal arrangement, but fewer UK workers are in that category compared to Indian firms sending staff to the UK.
• Will this affect immigration volumes? The government says the visa/immigration regime remains unaffected by this tax clause.
Conclusion
The UK-India trade deal represents an ambitious step in post-Brexit trade policy, aiming to strengthen economic ties, cut tariffs and facilitate cross-border business. Amid the many headline elements (car exports, whisky tariffs, services trade), the national insurance/social security clause stands out for its wide public interest.
Whether the NIC exemption is a clever way to prevent double taxation and ease mobility, or a worrying concession that undercuts UK workers, depends largely on how the scheme is implemented and monitored. The devil will be in the detail — how many workers benefit, how many firms use the arrangement, whether it becomes a favoured route, and how the Treasury revenue impact unfolds.
For now, the key message: this is not a universal NI waiver for all Indians working in the UK, but a targeted relief for a defined class of temporary (up to three years) intra-company transferees. That nuance is often lost in the broader debate.
Attached is a news article regarding Indians not face to pay nation insurance in new trade deal in the uk
Article written and configured by Christopher Stanley
In-- Google tag (gtag.js) --> <script async src="https://www.googletagmanager.com/gtag/js?id=G-XDGJVZXVQ4"></script> <script> window.dataLayer = window.dataLayer || []; function gtag(){dataLayer.push(arguments);} gtag('js', new Date()); gtag('config', 'G-XDGJVZXVQ4'); </script>
<script src="https://cdn-eu.pagesense.io/js/smilebandltd/45e5a7e3cddc4e92ba91fba8dc
No comments:
Post a Comment