Some good news:
Self-employed lecturers, teachers, instructors or those in a similar capacity may have simplified National Insurance arrangements from 6 April 2012.
HMRC is consulting on a proposal that the Social Security (Categorisation of Earners) Regulations 1978 and The Social Security (Categorisation of Earners) Regulations (Northern Ireland) 1978 (the CAT regs) in relation to lecturers, teachers, instructors or those in a similar capacity be repealed.
The CAT Regs treat certain types of self-employed earners as employed earners:
- Officer cleaner
- Cleaner of any telephone apparatus
- Employment of a person by his or her spouse for the purposes of the spouse’s employment.
- Lecturer, teacher, instructor or in any similar capacity in an educational establishment by any person providing education
- Employment as a minister of religion, not being employment under a contract of service or in an office.
- Employment as an entertainer, not being employment under a contract of service or in an office.
This consultation concerns only lecturers, teachers, instructors or those in a similar capacity in an educational establishment.
Under the CAT Regs individuals concerned will pay Class 1 NICs on the income to which the Regulations apply. Self-employed individuals normally pay Class 2 and Class 4 NICs.
HMRC’s views on the lecturers etc was broadened following the unreported case St John’s College School, Cambridge v Secretary of State for Social Security (CO/3246/99) where visiting instrument teachers gave music lessons to pupils of St John’s College School. HMRC decided that the CAT Regs apply to certain vocational training delivered both in academic buildings and more widely, as well as to academic tuition.
The extent to which the CAT Regs apply to vocational training depends on the precise nature of the tuition delivered whether or not that training or instruction is part of an establishment’s own curriculum.
HMRC accepts that its past guidance has been unclear and its interpretation too ambiguous. The policy intention is now to cut administrative burden and cost.
Consultation ends on 6 January 2012.
For consultation questions see: HMRC consultation: Lecturers, teachers, instructors or those in a similar capacity