Brexit update: Social Security coordination for employees working abroad

Now that we have a Brexit deal in place, what is the Social Security position of employees embarking on a temporary international work assignment from 1 January 2021?

As before, workers who move between the UK and the EU will only have to pay into one country’s Social Security scheme at a time, so there are no double contributions.

The country to which an employee will pay Social Security contributions depends on whether the EU country they’re going to work in has agreed to apply the ‘detached worker’ rules or not, and whether the employee’s work in that country is temporary.

Essentially, however, where an employee will be working temporarily in an EU country for up to two years, and that country has agreed to apply the ‘detached worker’ rules, by 1 February 2021 it will remain possible to continue paying UK National Insurance contributions (NIC).

Employees who went on assignment before 1 January 2021 will also continue to pay UK National Insurance contributions.

Unfortunately, we don’t yet have a definitive list of which countries have agreed to apply the detached worker rules and which haven’t. However, it remains that if you go to work in an EU country before 1 February 2021 and they have not already opted out of the ‘detached worker’ rules, you should apply for a certificate from HMRC to continue paying UK National Insurance contributions only, since you should be able to remain covered even if the country opts out later.

Details of how to apply for the certificate are here:

For those countries that don’t apply the detached worker rules, it’s likely that Social Security contributions will be due only in the country where the employee is working.

For employers, this is where it will get complicated, and potentially expensive, as you will need to be able to calculate and report Social Security paid to another country, likely via an adapted payroll system.

Whilst the Brexit deal means we remain on a level playing field, NIC for internationally mobile employees is never simple.

If you have any queries, please speak to your usual Larking Gowen contact. You can find contact details on the Our People section of the Larking Gowen website. Alternatively, call 0330 024 0888 or email enquiry@larking-gowen.co.uk.

Tessa Brown