They have acknowledged that COVID-19 related travel restrictions continue to impact on the movement of workers between the UK and the EU and that people may still be working temporarily in a location that they would not normally expect to be in.
This is important because as well as potential tax implications there are social security implications when working in a country other than where you would normally be based. Social security may be due in the temporary location, or steps may need to be taken to prove exemption.
As an employee where you pay social security contributions will depend on your personal circumstances and the country you are working in. As an employer, the liability to pay social security contributions will follow that of your employees.
If an employee is working temporarily outside of the UK, on an assignment for example they may qualify to remain in the UK National Insurance scheme and not pay social security in the country they are working in. In order for this to apply, it is necessary to make an application to HMRC who, if the criteria are met, will issue a Portable Document A1 (Certificate of Coverage) as proof that UK National Insurance can continue to be paid rather than social security contributions in the country where work is being performed.
Where the temporary work location is as a result of COVID-19 rather than an official assignment, it is necessary to complete the same process but also provide details of the COVID-19 related restrictions that apply.
For people who find themselves working in the UK rather than their European home, the reverse applies and they would need to contact their home country authorities to obtain a certificate to keep them in their home social security scheme and out of the UK scheme.
It is important to note that the arrangements with the EU that allow HMRC to disregard changes to individuals’ work locations will end no later than the end of December 2021 but this is under ongoing review and may cease earlier.
We are happy to advise on the above and to assist with the completion of the necessary forms.