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UK workers could face double social security charges if they work in the EU from January

Employers, employees and the self-employed who need to start working in the EU after 1 January could become liable for double social security charges.

While we were members of the EU, the EU regulations ensured that people avoided double social security liabilities if they worked in two or more countries in the EU.

Now it is not clear whether these rules will continue to apply because, although we have a ‘new agreement’, it appears to allow EU countries to ‘sign-up’ to the Social Security Cooperation Arrangements on a country-by-country basis. It is therefore possible that some countries in the EU may not sign up to this part of the Agreement.

If this proves to be the case, such costs will have a real double cost to employers, as there is not – unlike with income taxes – any system of off-setting international social security costs in this type of situation.

One would hope that the majority of EU states will sign-up to this aspect of the Trade and Cooperation Agreement, but it is possible that some may not.

The late finalisation of the Agreement means that firms who need to send UK-based employees to EU countries in the near future simply won’t know what individual EU states intend to do in this regard and hence will find it difficult, if not impossible, to provide meaningful fee quotes for the services they are hoping to provide over the coming months.

While the old EU Social Security Regulations covered a number of countries outside the EU officially – e.g., Switzerland and Norway – the new Agreement does not appear to provide for any automatic Social Security coverage in respect of these states. Even if the EU states do join up to the Social Security terms within the UK/EU Trade and Cooperation Agreement, companies sending employees to Norway, for example, could still face the risk of double charges arising in those cases.

The new EU/UK Trade and Cooperation Agreement provides some valuable guidance for UK and EU employers with internationally mobile workers – at least compared to the option of a ‘no-deal’, which was the alternative facing UK-based employers, but it is important to recognise that the agreement has some significant flaws within it.

Would you like to know more?

If you would like to discuss the above or how it may affect you, please get in touch with your usual Blick Rothenberg contact or Robert Salter, using the details to the right.

For any press queries, please contact David Barzilay whose details are to the right.