Laura Jackson
We have now reached the end of the Brexit transition period and the UK-EU Trade and Co-operation Agreement has been agreed.
Social Security
The UK-EU Trade and Co-operation Agreement includes the Protocol on Social Security Coordination. The agreement largely replicates the current EU social security coordination regulations.
After so much uncertainty, it will be very welcome news to employers that from 1 January 2021 it can only be possible to be within the social security legislation of one country at a time and the scenario of compulsory double social security contributions will not arise. Contributions will generally be payable in the country where activities are undertaken, with special provisions for multi-state and detached workers.
One interesting addition to the Protocol is that there is the possibility for countries to ‘opt out’ of the detached worker rules. Countries have until 1 February 2021 to make this decision and, if they choose to opt out, then there will be no possibility of remaining in the home country social security legislation for posted workers on temporary assignments.
Recruitment
Employers who have EU, EEA or Swiss citizens on their staff should encourage them to apply for pre-settled or settled status by the deadline (30 June 2021).
The Government has now published further details for the ‘points based’ immigration system the UK will use from 2021.
Healthcare
Employees will also be anxious about their access to healthcare going forward. The two current EU schemes are the European Health Insurance Card (EHIC) and the S1 reciprocal schemes. The EHIC provides access to healthcare services across the EU for a period of fewer than three months. The S1 scheme allows individuals to receive ongoing health and social care in another country. Services received are at the cost of the home country.
All EHIC cards already issued will remain valid until their expiry date and can be used in the EU. Once an EHIC expires or if a certificate is required for the first time, the Government will now issue a Global Health Insurance Card (GHIC) here – this will give healthcare cover in the EU. The S1 scheme will also still apply. However, if employees are travelling to Switzerland, Norway, Iceland or Liechtenstein, and not eligible for an S1, then you should ensure that they take out appropriate insurance/ private medical cover for the time they will be spending in these countries.
Tax
Brexit should have no impact on an individual’s personal tax liabilities. Liability to tax is governed by double tax agreements, agreed individually between the UK and the other party, and these have never been subject to EU rules.
UK legislation originally determined the eligibility of non-UK residents to the tax-free Personal Allowance (PA) by whether or not they were EU nationals. This would have produced a rather quirky situation of non-UK resident EU citizens having the benefit of the PA while non-UK resident UK citizens did not. However, the legislation has now been amended to ensure non-UK resident UK nationals are eligible for the PA.