Following the end of the transition period, workers moving between the UK and the EEA and Switzerland should only pay social security contributions to one country, usually this will be where the work takes place confirms HMRC.
HMRC has published guidance to help workers and employers understand where social security contributions need to be paid for those moving between the UK and the EEA or Switzerland.
Under the free trade agreement negotiated between the EU and the UK, such workers only have to pay into one country’s social security scheme at a time. Those moving for more than a period of two years will be paying contributions to the country in which they are working.
For those working for periods of less than two years whether this is the country in which the work is taking place or where they have moved from will depend on whether the country has adopted detached worker rules. These rules allow for temporary workers to continue to pay social security contributions to the country in which they are normally resident.
The UK has adopted detached worker rules, which means that UK workers sent to an EU country and Switzerland to work for up to 24 months can apply for an HMRC certificate and only pay national insurance contributions (NIC) and won’t be liable to pay social security contributions where they are working. This also applies to work of up to 12 months in Iceland and 36 months in Norway.
The same applies for workers that come to the UK from Norway, Switzerland, Iceland and EU countries that have agreed detached worker rules. ICAEW's Tax Faculty understands that all EU member states have confirmed their intention to adopt the rules, and HMRC guidance has been updated to include a full list of countries that have done so already. These temporary workers can apply for certificates and pay social security contributions to the country from which they’ve moved rather than UK NIC.
For those workers that do not qualify for a certificate and those that are moving permanently for work, then social security contributions will be due in the country in which the work is undertaken. In such cases, the relevant EU social security institution has to be contacted for information on how these payments should be made.
HMRC highlights in particular the case of Liechtenstein, where UK workers not eligible for a certificate from HMRC will have to pay UK NIC for the first 52 weeks and maybe liable to pay social security contributions in Liechtenstein.
HMRC’s guidance details the eligibility criteria to apply for certificates under detached worker rules and outlines how to apply for certificates.
Read the guidance in full:
- Guidance for workers from the UK working in the EEA or Switzerland.
- Guidance for workers from the EEA or Switzerland working in the UK.
More ICAEW support on the end of the transition period:
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
- 07 Jan 2021 (12: 00 AM GMT)
- Updated to include link to HMRC 's list of countries that have adopted detached worker rules.
- 08 Feb 2021 (12: 00 AM GMT)
- Updated in light of confirmation from HMRC that all EU member states want to apply the detached worker provision.