Workers to 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, say leading tax and advisory firm, Blick Rothenberg.

Robert Salter, a specialist in Mobility, Employment Tax and International Social Security at Blick Rothenberg said: “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.”

He added: “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 – and is therefore possible that some countries in the EU may not sign up to this part of the Agreement.

Salter said: “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.”

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

Robert said: “The late finalization 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.”

He added: “whilst 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 en mass to the Social Security terms within the UK / EU Trade & Cooperation Agreement, companies sending employees to Norway, for example, could still face the risk of double charges arising in those cases.

Salter said:  “The new EU / UK Trade & 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, bit it is important to recognize that the agreement has some significant flaws within it.