On the 4th April 2019, HM Revenue & Customs (HMRC) published a special employer bulletin relating to key social security considerations in the event of no deal exit from the E.U.
HMRC has confirmed our initial fears that double social security costs could potentially arise. The alert mentions employee obligations, but in certain circumstances, there would be the potential for double employer costs too, plus the additional administration and compliance costs associated with such a position.
Whilst HMRC go on to say they are still working with E.U. members to try to reach a social security agreement even in the event of a no deal, they are placing the initial onus on employers to check with each competent authority in each location where you have UK employees working in the E.U., to ascertain the position. This is placing an enormous burden on U.K. business, and each E.U. authority, and in our view, is wholly unwelcome and not practically workable.
Likewise, HMRC has commented on U.K. inbound personnel from the E.U., but the present link in the article merely advises that they will publish further guidance at a later date. In our view, U.K. NIC for posted workers coming from abroad should be covered by the U.K. domestic legislation, which requires an individual to be present in the UK for 52 weeks or more, before U.K. NIC may arise. The risk here is in terms of when you count the 52 weeks from their first day of arrival, or exit day, once the EU rules no longer apply.
This is a complex area and ties in with an individual's right to social security and pension benefits, so becomes very personal to each employee.
Should you require any assistance with regards to the above or would like further information, please do not hesitate to contact our Reward & Employment Tax Solutions team.