Following the end of the Brexit transition period, on 31 December 2020, it was inevitable that there would be some changes for payroll, particularly within those companies that employ workers travelling from the UK to carry out work in other countries.

This is also true where businesses deal with workers travelling from the EEA or Switzerland, who are coming to work within the UK.

NICs for workers from the UK working in the EEA or Switzerland

HMRC published a guidance page solely on this topic in late December 2020, which has been updated intermittently since to mirror any changes.

Where social security contributions are paid is largely dependent on the individual circumstances of an employee, self-employed individual, or employer, but can also be dictated by the location that the work is being completed in.

If work is attached to a specific occupation, or the work is only being carried out on a temporary basis in the EU, Iceland, Liechtenstein, Norway or Switzerland, then it may be possible for a worker to obtain a certificate or document from HMRC. This will permit the payment of NICs in the UK, with no requirement to pay social security contributions elsewhere.

The guidance page provides detailed information confirming which individuals working in the EU, and additionally, those working in Iceland, Liechtenstein, Norway, or Switzerland, should apply for a certificate or document from HMRC to ensure that they only pay NICs in the UK. Either the individual in question can do this, or they can ask their employer to do it on their behalf.

Where individuals believe they may be eligible for a certificate or document, then there are several different forms to complete, dependent on their circumstances. They are: Form CA3822, Form CA3837, Form CA8421 and Form CA3822.

Where HMRC determines that individuals must pay UK NICs, a certificate or document will be issued which can be used to demonstrate why social security contributions do not need to be paid in the EU, Iceland, Liechtenstein, Norway, or Switzerland.

As always, a change in situation may mean amendments to the ways in which the rules apply. Individuals need to inform HMRC of these changes, confirming what their previous circumstances were, what has changed, and when the changes took place.

NICs for workers from the EEA or Switzerland coming to work in the UK

Just as the end of the transition period signalled changes to NICs for UK workers going to work in the EEA or Switzerland, it also meant changes for those from the EEA or Switzerland coming to work in the UK.

Individuals coming to work on a permanent basis in the UK from the EU, Norway, or Switzerland, will only be expected to pay into one country’s social security scheme at any given time, and this will often be in the UK, if that is where the work is being carried out.

Again, those working in select occupations or only working on a temporary basis in the UK, may be able to receive a certificate or document from the social security institution that they come from, which will enable them to pay social security contributions there, with no requirement to pay NICs in the UK.

There is a separate guidance page which explains which individuals coming from the EU, and those coming from Iceland, Liechtenstein, Norway, or Switzerland should apply for the relevant certificate or document to allow them to only pay social security contributions in that country.

The forms for completion are the same as those used when a worker from the UK goes to carry out work in the EEA or Switzerland, and, again, which form applies will be dependent on a worker’s circumstances. This will need to be discussed with the relevant social security institution.

The certificate or document that relates to where an individual pays social security contributions/UK NICs is not a work permit. Further information on the UK’s immigration rules is available online.

Where an individual coming to work in the UK cannot obtain the appropriate certificate or document from the relevant social security institution, then they will be required to pay NICs in the UK. This also applies if they are coming to work in the UK on a permanent basis.

Future implications

It is widely accepted that the implications of Brexit are vast and far-reaching, and it would not be possible to cover them all in an article such as this. However, it is important for payroll professionals to be aware of the potential changes to NICs (as outlined), the changes to Right to Work (RTW) documentation that can be accepted following the end of the transition period, and the possible impacts on employment law in the future.

There is still much to be confirmed in these areas, so payroll professionals should be alert to any changes that may be introduced over the coming weeks and months.