European Union Regulations have been introduced in relation to national insurance contributions which will be of interest to employers with employees who move around the EU to work. HMRC have published preliminary guidance to help employers prepare for the new regulations.

The new EU Regulations will apply to nationals of EU Member States and also to stateless persons and refugees residing in a Member State and certain family members. Under the new regulations which will apply from 1 May 2010 employers will have important responsibilities.

Where under the EU Regulations the UK's social security legislation applies, the employee and employer (or person treated as the employer) must pay UK Class 1 National Insurance contributions. Where, under the EU rules, the social security legislation of another Member State applies, then no UK National Insurance is due.

Where employees come to the UK from other Member States, employers should operate National Insurance contributions from the start of the employment unless they receive a form (the new Form A1) showing that the individual is exempt from National Insurance in the UK and subject to the legislation of another Member State. Where employees go to work in another Member State, employers should apply to HMRC Residency to find out whether the employee should remain in the UK National Insurance system.

Specific rules also exist for short term assignments and for workers who may work in two states. In addition there are particular rules for certain other groups e.g. mariners, civil servants and armed forces, and third country nationals which should be noted.

Further details including a list of frequently asked questions is available at http://www.hmrc.gov.uk/nic/work/new-rules.htm