[UK] Brexit and Social Security Implications


In September, we publicised that HMRC had produced their Employer Bulletin Brexit edition on the 24th of September 2019.  Members and readers have particularly commented on the article that talked about changes for UK employers who send workers to the EU, the EEA or Switzerland.  At the moment, reciprocal agreements exist that would be maintained in the event of a Brexit deal as a result of transitional rules in the Withdrawal Agreement.

But these reciprocal agreements to holders of A1 certificates will not apply in the event of a no deal Brexit.  This may mean that social security contributions are payable in both the country from which they were expatriated and the host country.  Dual social security contributions will not be popular with our employees, to say the least.

At the moment, only a reciprocal continuation agreement is arranged with Ireland.  None of the other “EU27” countries (or EEA countries or Switzerland) have signalled their intentions.  Or, if they have intimated what they would like to do, they have not communicated this clearly to employers.

At the start of October, HMRC began writing to A1 holders in the UK advising that social security contributions may be payable in the host country after exit day.  Employers and employees are understandably confused and this has not been helped by the government’s “No-Deal Readiness Report” which says on page 41:

“The UK will continue to operate the EU social security coordination rules as far as possible unilaterally at exit day. This unilateral approach will provide some certainty and those receiving UK benefits will continue to receive these as long as they continue to meet eligibility criteria. Social security coordination, including reciprocal healthcare, is however dependent upon reciprocation”

It is the word reciprocation that is worrying employers.  As explained above, nobody really knows what will happen if there is no deal.  If there is a deal, we can be pretty sure that things will stay as now until at least the 31st of December 2020.

HMRC’s letter says that the employee may want to talk to their employer, so be prepared to be contacted about an issue on which we can give little / no advice!  The Global Payroll Association sourced the contact details for all EU, EEA and Swiss A1 issuing authorities.  The issuing authority should be contained on the A1 itself but we felt it responsible to point this document out.