Overview.

  1. The Trade and Cooperation agreement (TCA) between the UK and EU sets out a framework for UK workers, whilst working temporarily in the EU, to continue to pay their social security contributions in the UK. Most UK employers will not want to pay a social security contribution locally, for the days that their UK employees spend working in the EU and will want to ensure that they can take advantage of this provision of the TCA.
  2. The new system is subject to a procedure, that is very similar to the rules that existed before the UK left the EU, and UK employers will need to ensure that they comply with these rules if they want to avoid paying a national insurance payment in the EU when their employees travel there for work. The process involves obtaining proof to payment of social security in the UK, and notifying each EU member state the worker travels to of this.
  3. The rules do not create a right to work, to enter, an EU country, and where a UK employer sends workers to the EU in rotation, with one group replacing another, the rules do not apply at all.

Why is this important to a UK employer?

If you’re a UK employer, and you have workers traveling to the EU to work, you need to check to make sure that you don’t have a pay a local social security payment to the country where your workers travel to. It’s an issue then for anyone with EU customers or clients. Where a UK employer does have to pay local social security, this normally involves registration with the local tax authorities and sometimes registering a business locally as well.

Did UK workers in the EU have a pay a local social security contribution before Brexit?

In most cases, no, if UK employers complied with the EU rules. This is because EU rules generally allowed UK workers and employers to continue to pay their social security contributions (NI payments) in the UK whilst they were temporarily working in the EU, subject to a process. Other than this, the general rule was that the social security payment always had to be paid where the worker was actually working (i.e. in the EU for the days that a worker spent there).

Briefly, what was the process?

UK employers needed to obtain a form from HMRC, called an A1 (or E101). This confirmed that the employer was paying UK NI payments for the worker. This evidence then needed to be sent before travel to the EU member state where the worker was traveling to, (the process was called advance notification, and still exists). Provided that this was done, then the UK worker in the EU just carried on paying UK NICs. But there were limits – generally the scheme only lasted 24 months, and a worker sent to replace a worker in the same place in the EU doing the same job had to pay local NI from the first day of work.

Has the UK/EU trade agreement changed anything?

Overall, no. So, the general rule is that workers will pay social security contributions in the place where the activities take place, (in other words, wherever they are working in the EU), subject to two changes contained in the trade agreement.

The changes brought in by the TCA.

The TCA has created a new category of worker for the purposes of social security payment – a “detached worker”. This is simply a new definition for workers who travel to the EU to work, but can continue paying their social security contributions in the UK. Being a detached worker does not give the person the right to travel and work in the EU, either with or without a visa or work permit, and the status does not alter the need for the mobile worker to comply with immigration requirements.

A detached worker under the terms of the TCA.

There are various definitions in the trade agreement covering different forms of work, but the most important one is the one for employed workers. To qualify, the worker needs to be an employee, for an employer that normally carries on its activities in the same state where the worker is employed (in this case a UK employer with a UK worker). They then need to be sent to work temporarily to another state (in this case, an EU member state) for a period of up to 24 months, provided that they are not replacing another worker. Subject to meeting these requirements, the detached worker can then pay their social security contribution in the UK, whilst working in the EU.

The procedure required.

Subject to having an A1 form that proves that the UK worker is paying their contribution in the UK, this then needs to be sent to each EU country that the worker will be sent to before travel – a process called advance notification. Without this, the employer may need to pay a local social security contribution in the place the worker is sent to work.

Local contact points.

There is a list of national contact points available on the EU website – https://europa.eu/youreurope/citizens/national-contact-points/index_en.htm?topic=work&contacts=id-611492

How can I find out more about you?

The IEMC offers expert consultancy on all matters affecting business visitors and workers posted short-term, to the EU – as well as the practical problems created by the UK/EU trade agreement. We cover all the questions UK businesses will have – on trade, providing services, travel, data and building, and servicing EU customers and clients. Its services support those who may be more confident with the new rules and regulations and also for those who are new to the area and need help understating what the rules are and how they can comply and take advantage of them. Get in touch via our website or at office@iemconsultancy.org