How to be a good host (employer): It’s all in the detail

(5 min read)

The host employer provisions are designed to ensure that UK-based entities cannot avoid NICs liability by interposing an offshore employer. Recent tribunal decisions, including Wood Group, provide clear warnings that the tribunals will look beyond the contractual labels in offshore arrangements to the underlying reality of who benefits from and controls the workforce. The tribunals adopt a purposive approach, prioritising substance over form: if a UK business benefits from workers’ labour, it is likely the host employer, regardless of subcontracting labels or offshore contracts.

Four recent judgments by the First-tier Tax and Upper Tribunals consider how the Host Employer Provisions apply to common offshore employment arrangements in the oil and gas sector. In this article for Tax Journal, we look at what we can learn from the decisions in Bilfinger Salamis, Wood Group Engineering (North Sea), Odfjell Technology, and Aramark.