UK employees working in Europe post Brexit

26 March 2021

As an employer operating in a pre-Brexit environment, you will have been used to the free movement of people across the EU. Staff going on business trips, commuting between countries or undertaking more formal overseas postings have been commonplace arrangements. Whilst these have always brought with them various considerations regarding such aspects as tax, social security and healthcare, for employers, the post-Brexit certainly brings additional considerations.

EU social security

Intra-EU and EEA social security coverage has been affected by Brexit. Whilst the trade agreement has meant that many of the same rules and processes apply, there are some important differences.

For employees going on business trips to the EU there generally aren’t obligations from a social security perspective. With regard to individuals who regularly work between the UK and other EU locations the rules also remain broadly the same in this post-Brexit world. Such individuals are known as multi-state workers and in these circumstances, social security would usually be due in the country in which the individual resides, if they spent at least 25 percent of their time working there. This might apply for an individual with responsibilities in a number of countries, working regularly in each and including the UK.

For employees going on longer-term postings, new rules for social security have applied from 1 January 2021. Forms ‘A1’ can be applied for to confirm that an employee (who is on assignment from 1 January 2021) will remain in their home country social security scheme and be exempt from social security contributions in the host location for up to 24 months. For example, a Form A1 could be obtained for a UK employee working in France or Spain to confirm their continuing liability to UK National Insurance and exemption from French or Spanish social security for that period.

In some circumstances, social security contributions in the EU are considerably higher than the UK, for example in France. Under the old rules the A1 could be extended to five years in certain circumstances. In addition, employers who had employees on postings prior to 31 December 2020 can continue to be governed by the old rules so need to be monitored in accordance with this.

The social security position for UK individuals working in Norway, Switzerland, Iceland and Lichtenstein from 1 January 2021 onwards will not be covered by the above EU rules but instead will be based on separate arrangements. For example, the agreement between the UK and Norway allows for a coverage period of three years.

Tax

The rules regarding tax for business trips and longer-term postings from the UK to the EU haven’t changed as a result of Brexit. However, there are often tax considerations for such arrangements. Longer postings will often bring employer payroll reporting and individual employee tax return obligations. Short-term business trips will vary from country to country, but senior or board-level individuals will often trigger obligations at an early stage.

Healthcare

Staff travel will often be covered by employer-provided travel insurance, but in addition, for access to emergency state healthcare in member states a European Health Insurance Card (EHIC) was often used. This would allow UK nationals to obtain state medical treatment on the same basis as a resident. EHICs that are still in date can continue to be used, and in limited circumstances a new UK-issued EHIC can be applied for.

A GHIC (UK Global Health Insurance Card) should now be applied for. As with the new rules regarding social security coverage, this does not apply to Norway, Switzerland, Iceland or Lichtenstein.

Posted Worker Directive

The Posted Worker Directive was enacted many years ago to guarantee the protection of certain rights and working conditions for posted workers within the EEA. The Directive has been enhanced in 2016 and 2020 such that all employers with mobile employees have compliance obligations under it. The impact of these depends on how each member state has incorporated the Directive into its domestic legislation but can be triggered for any work-related presence. So, where a worker for a limited period carries out his or her work in an EEA member state other than the state in which he or she normally works, (either as a subcontractor, intra-company move or temporary work/business trip) there may be compliance obligations. In some countries, this will require a pre-travel registration and the availability and retention of relevant documents (such as employment contracts, and the A1 forms referred to above) and the appointment of a liaison person for labour law compliance.

This is a complex area, and for longer-term postings the obligations will usually be captured as part of the posting process, but for business trips it is an area that brings tracking and compliance challenges.

Other considerations

There are a number of other key considerations when sending staff to the EU. Immigration has changed significantly since Brexit and due attention should be given to ensuring that appropriate immigration processes and documents are in place before travel, whether this is for business trips or for longer-term postings.

In addition, as the Coronavirus pandemic evolves, employers should ensure that country by country rules and regulations regarding travel are observed.