Overseas employees potentially face double NICs liability following a no-deal Brexit

Employees working overseas on secondment could face paying twice as much in National Insurance Contributions in the event of a no-deal Brexit, HM Revenue & Customs (HMRC) has warned.
If the UK leaves the EU without a withdrawal agreement then current agreements to avoid double payment of the equivalent of National Insurance Contributions (NICs) in member states will be voided.
The EU Social Security Coordination Regulations ensures employers and their workers only need to pay social security contributions such as National Insurance contributions (NICs) in one country at a time.
Employees of UK companies working in the EU member states, European Economic Area (EEA) or Switzerland would, therefore, be expected to pay social security contributions in both the UK and the country where they are seconded.
According to the Chartered Institute of Taxation (CIOT), tens of thousands of employees could be affected. However, those hardest hit are likely to be in the financial services sector, where secondment is more common.
HMRC is advising businesses to make sure they are prepared for any eventuality.

  • If an 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, they will need to contact the relevant EU/EEA or Swiss authority to confirm whether they should start paying social security contributions in that country from that date. If your employee is a UK or Irish national working in Ireland, their position will not change after Brexit.
  • A replacement for the A1/E101 form will be issued for new applications after Brexit to ensure employees continues to make UK National Insurance contributions to maintain their social security record.

The Government has also issued a draft statutory instrument on social security, which can be found here.

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