Social security changes if no deal Brexit

At the time of writing there is still uncertainty surrounding whether we’re going to leave the EU with a deal or not. We wrote a blog post a few weeks ago about preparing your business for Brexit and dealing with the issues it may bring. Now we’re highlighting another key matter that owner-managers may need to plan for, should we leave the EU without a deal: social security. 

Many UK employers have employees working in the EU, EEA or Switzerland and calculate the national insurance contributions (NIC) due on their earnings in accordance with EU regulations. In the event of a no-deal Brexit, these EU regulations will no longer apply to UK employers.

Currently the EU Social Security Coordination Regulations ensure employers, employees and the self-employed only need to pay social security contributions (such as NIC in the UK) in one country at a time. However, if we leave without an agreement, the coordination between the UK and the EU will end.

This will mean that employees, their employers, and self-employed workers in the EU, the EEA or Switzerland may need to pay social security contributions in both the UK and the country in which they are working at the same time.

If the employee or self-employed worker is a UK or Irish national working in Ireland, their position will not change after Brexit, they are covered under the international agreement signed by the UK and Ireland in February 2019. Employers, employees and self-employed workers in this situation will not need to do anything different.

UK employers will need to do the following to prepare:

• If employees are currently working in the EU, the EEA or Switzerland and have 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
• However, if the end date on the form goes beyond the day the UK leaves the EU, employers will need to contact the relevant EU/EEA or Swiss authority to confirm whether or not they need to start paying social security contributions in that country from that date. The European Commission’s website will help find the relevant country’s authority
• A replacement for the A1/E101 form will be issued for new applications after Brexit. This ensures employees continue to make UK National Insurance contributions to maintain their social security record. Employers can still use the same form on GOV.UK to make an application after the UK has left the EU

Self-employed workers will need to do the following to prepare:

• If they are currently working in the EU, the EEA or Switzerland and have a UK-issued A1/E101 form, they will continue to pay UK National Insurance contributions for the period shown on the form
• If the end date on the form goes beyond the day the UK leaves the EU, they will need to contact the relevant EU/EEA or Swiss authority to confirm whether or not they need to start paying social security contributions in that country from that date. The European Commission’s website will help them find the relevant country’s authority
• A replacement for the A1/E101 form will be issued for new applications after Brexit. This ensures they will continue to make UK National Insurance contributions to maintain their social security record. They can still use the same form on GOV.UK to make an application after Brexit.

The UK Government is working to protect UK nationals by seeking reciprocal arrangements with the EU or Member States to maintain existing social security coordination for a transitional period until 31 December 2020. Individuals in scope of these arrangements will only pay social security contributions in one country at a time.

Please get in contact with by emailing us at discovery@a4g-llp.co.uk or by calling us on 01474 853 856 to discuss this further and if you have any other questions regarding Brexit and your business.