National Insurance and Social Security Payments Post-Brexit - the UK and the EU’s future relationship

Now that the Brexit transition period has ended, you may be worried about when and where you will have to pay National Insurance or social security contributions.

A lot of this will depend on your circumstances and the country you’re working in.

When and Where You Will Pay Social Security/NI Contributions

If you’re from the UK and working within the EU, or in Norway or Switzerland, you’ll only have to pay into one country’s social security system at a time - in the country where the work is taking place. However if you’re a temporary worker in these areas (or in Iceland or Liechtenstein) then there’s the possibility you can get documentation from HMRC to enable you to continue making NI contributions - meaning you won’t pay social security whilst abroad.

The same applies for individuals coming into the UK for work. Usually, they will pay into the UK system, but they may be able to get a document or certificate to allow them to to carry on paying social security contributions in their home country in the EU, Norway, Iceland, Switzerland or Liechtenstein.

Nationals of the EU, Norway, Iceland, Switzerland or Liechtenstein who were living in the UK before January 1st, 2021 should also apply for settled status - the deadline for applications is June 30th, 2021.

The rules on paying NI contributions for UK residents working temporarily in the EU state that you must be:

1. Lawfully resident in the UK
2. Employed in the EU (or Switzerland, Iceland, Liechtenstein or Norway) since before the Brexit transition period ended
   • A national of the UK or Switzerland working in Switzerland since before the Brexit transition period ended
   • A national of the EU, Iceland, Liechtenstein, Norway or Switzerland who was resident in the UK before the Brexit transition period ended (this includes those with settled status)
   • A family member of a national of the EU, Norway, Iceland, Switzerland or Liechtenstein residing in the UK, with settled status.
   • A person with dual nationality, one nationality being of the EU, Norway, Iceland, Switzerland or Liechtenstein
   • A multi-state worker, working mainly in the UK and in 2 or more countries from the UK, EU, Norway, Iceland, Switzerland or Liechtenstein since before the Brexit transition period

If you meet these conditions you can apply for the relevant documentation. Similar rules apply for those from these areas coming to work in the UK temporarily.

Detached Workers

The rules relating to detached workers (who are moving to work abroad for less than two years) state that if an EU member state specifies, the employee in question will remain subject to their home countrys system. However, the intended duration of the work must be less than 2 years, and the employee must not be replacing another detached worker.

EU countries must agree to apply the detached worker rules by February 1st, 2021 in order for them to apply.

Even if you are not eligible to pay NI insurance, and have to pay social security contributions to the country you are working in, you may still be able to ‘top up’ your NI contributions with Voluntary Contributions.

These rules are complicated, and subject to change. We recommend you keep yourself up to date with the latest guidance on the Government’s website (which will be updated regularly as soon as new information is available) and seek expert advice where possible if you are unclear on your situation.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.