National Insurance Tax with Company Private Health

I have been using (http://www.thesalarycalculator.co.uk/salary.php) to calculate my take home salary. I am wondering if it is possible to opt out of paying the national insurance tax?

I am being asked to relocate for a job in London. My company will be offering me their private health insurance as well as a retirement/pension system where they will match 100% of first 5% contributed. Seeing that they are offering both the health and pension benefits and that I am not a UK citizen and will not be retiring here. Can I opt out of paying this tax completely or at least get a discounted rate?

I am an American looking to live and work in the UK. Thanks!

FYI:
http://www.ssa.gov/international/Agreement_Pamphlets/uk.html

and:
http://www.hmrc.gov.uk/nic/work/ss-agree.htm#3a2
(Note: for clarification, this is from a UK perspective.)

If you are working in the UK you'll have to pay NI. Also the private health plans offered in te UK are a good benefit, but they are usually supplements to the NHS which you will have access to without any out of pocket charges as a UK resident.

Maybe.

The OP doesn't say if they will be working for a Japanese or US company whilst in the UK, or for a UK company. They also don't mention whether the intended final system for retirement will be from Japan or the US (US SSA). They don't mention if they have been posted to the UK for a US company for less than 5 years, and if so, will the US company sign a certificate of coverage. If it's a Japanese company (and the Japanese retirement system), there appears to be a UK/Japan agreement; which is why I included the HMRC link. I'm assuming the OP name of "jrb in japan" means they're working there now. Of course, as always, I could be wrong.

If the question is simply since the UK company they'll be employed by is paying a private health insurance benefit and pension, do they have to pay NI in addition, then I agree, the answer is: yes, they must pay NI.

More info required, but the results for all the above are available on the linked sites.

Thank you everyone! Especially you...theOAP! Great first post and follow up post. I should have been more clear. I am an American with Japanese wife. I have worked in Japan for the past 7 years and my company (an American company with a local UK based entity) is asking me to relocate to the London office.

I will be leaving Japan and taking the lump sum payout of what I have paid into the pension system there. No plans to work 25 years in Japan and retire there, even though I have already put in 7. I think the best course of action for me is to take the lump sum payout and leave.

So yes, I plan to eventually make my way back to the US and retire there, or at least work the majority of my older years there so I qualify for social security. I will also plan to live in the UK for less than 5 years. Next step, after gaining work experience in Europe for 1-2 years would probably be to relocate back to the US. So what does this mean for me now?

I read through your two links, thanks! This grabbed my attention..."On the other hand, if your employer sends you from one country to work for that employer or an affiliate in the other country for five years or less, you will continue to be covered by your home country and you will be exempt from coverage in the other country. For example, if a U.S. company sends an employee to work for that employer or an affiliate in the United Kingdom for no more than five years, the employer and the employee will continue to pay only U.S. Social Security taxes and will not have to pay in the United Kingdom."

So am I interpreting this correctly? I would not see the monthly deduction of NI tax on my monthly salary statement?

Thanks!

Ah one thing I noticed on the SSA site that was referenced. In the chart is says if you are hired in the UK then you have to pay UK coverage and taxes. So I am a bit confused now. I will not be an expat while in London. My company will ask me to relocate and then hire me locally with a local contract through the local UK entity of the American company. What does that mean for me? Thanks!

What does that mean for me?

Thanks for the additional info. In your case, you should talk to the HR Dept. of the American Company. All depends on whether you are hired by the London office, or sent on a 2 or 3 year posting as an employee of the American company. Read the 1st link (SSA) again, and ask about a certificate of coverage (both you and the American company pay into US SSA) as a result of a contract with the US company whilst you're in the UK. If you are coming from Japan and will be hired/employed by the UK office (no US company involvement in your employment), then you will pay UK National Insurance contributions, and nothing to US Social Security during your stay.

Ouch! I guess this means I will be paying the NI payments in full.

Regarding this website calculator...http://www.thesalarycalculator.co.uk/salary.php
If I wanted to get as accurate of a calculation as possible, how would I go about doing this.

For example, I will be married, my wife will not be working and I will have one child dependent as well. I assume this calculator is giving me the take home salary based on if I were a individual with no dependents. Can I expect to pay less in taxes, i.e. receive a tax break for my wife and child since they are not earning any income?

I tried checking the box that says married, but it didn't effect the final number at all. Plus I don't see anywhere to check for child dependents, but I would assume there would be some tax break for that as well, correct?

Thanks!

Josh

You are correct in saying that your income will be subject to NIC. This is hypothecated to buy a fraction of the UK state pension and other benefits so while it is a tax you may get something back in return.

I note you will receive a refund of Japanese pension contributions and am interested to know if this may be subject to US income tax at regular rates plus the 10% surcharge for early withhdrawals. I have not done any research in recent year on Japanese pension plans.

The UK stopped giving larger allowances for being married more than 20 years ago and for children some 40 years ago. There may be ways you can reduce your UK tax such as electing to claim the remittance basis, NOR relief or gifting income producing assets to your spouse (I note she is an NRA so you are limited from a US gift tax perspective as to how much you could gift her each year).

It could well be worth you taking some professional advice on this to put your mind at rest, but of course that is up to you to decide about.

Thank Guya! You definitely got me thinking about a few things though...i.e. the gifting to reduce income. I will definitely be looking to get a professional to consult me on this stuff after I make the move (but maybe before). Thanks!

Thank Guya! You definitely got me thinking about a few things though...i.e. the gifting to reduce income. I will definitely be looking to get a professional to consult me on this stuff after I make the move (but maybe before). Thanks!

As your company is asking you to do this transfer I'd ask them to pay for a tax professional to give you some advice as part of your relocation.

As your company is asking you to do this transfer I'd ask them to pay for a tax professional to give you some advice as part of your relocation.

Gifting and other complex tax planning is not going to be part of a normal tax assistance package. So the op will need to ask for extra tax advice on top of the tax service.