Brexit - The potential impact on UK employers sending workers to the EU, the EEA or Switzerland

Peter Goodman profile image

Peter Goodman, Partner

Peter joined Wilkins Kennedy in 1986 and was made a Partner of the firm the following year.

Oct. 28, 2019

Despite another extension to the Brexit date it is important for employers to consider the impact of the UK leaving the EU on their workforces, particularly those with employees working overseas in the EU, EEA or Switzerland.  Although it being an unlikely outcome, in the event of a no-deal Brexit, there may be implications for UK employers who have employees working in the EU, the EEA or Switzerland. 

The current regulations in place ensure that employers and their workers only need to pay social security contributions in one country at a time where they are working in another country within the EU.  However, if the UK leave without an agreement, this agreement between the UK and the EU will come to an end.

This means that employers with employees working in the EU, EEA or Switzerland may need to make social security contributions in both the UK and the country in which the employees are working at the same time.  Therefore, there is a potential cost implication for both the employer and the employees.

HMRC has advised that businesses should do the following to prepare:

  • If your employee is currently working in the EU, the EEA or Switzerland and has a UK issued A1/E101 form, they will continue to pay UK National Insurance contributions for the duration of the time shown on the form.
  • If the end date on the form goes beyond Brexit day, employers will need to contact the relevant EU, EEA or Swiss authority to confirm whether or not their employee needs to start paying social security contributions in that country from that date.

The European Commission’s website can be used to help confirm the relevant country’s authority.

  • If you have employees who are UK or Irish nationals working in Ireland, their position will not change after Brexit as they are covered under the international agreement signed by the UK and Ireland in February Employers do not need to take any action in this scenario.
  • A replacement for the A1/E101 form will be issued for new applications after Brexit. This will ensure that your employees can continue to pay UK National Insurance to maintain their social security record when working within the EU. Employers can still use the same form to make an application after the UK has left the EU.

The UK Government has confirmed that they are working to protect UK nationals by seeking reciprocal agreements with the EU or Member States to maintain existing social security coordination for a transitional period until 31 December 2020.  Individuals, and their employers, who are within the scope of these agreements will only pay social security contributions in one country at a time.

The UK has separate Social Security agreements in place with several non-EEA countries, such as Turkey, Croatia, Canada and the US.  These agreements are unaffected and will continue to operate post Brexit day.

For more information around this area, or for anything else Brexit related, please get in touch with your usual Wilkins Kennedy contact. 

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