Brexit Transition Period comes to an end…
At 11 p.m. on 31 December 2020, the Transition Period (during which the UK was effectively treated as still part of the EU) came to an end. In our previous article, "Social Security and Brexit: Where are we now?", we highlighted the risks faced by UK employers with employees working in the EU if no agreement on social security coordination was reached by that point.
Protocol on social security coordination
Fortunately, just before Christmas, the UK and EU settled a Trade and Co-operation Agreement which included a protocol on social security coordination (Protocol). This Protocol ensures that many of the EU social security coordination rules continue to apply to the UK - welcome news for employers with workers moving to and from the EU.
As with the EU rules, the purpose of the Protocol is to ensure that employees and employers are only subject to the social security regime of a single state at any one time. The general rule is that contributions are payable in the country where the work is done subject to special rules for individuals temporarily working outside their home country (Detached Workers) and for multi-state workers.
Importantly, the Protocol applies to individuals that are subject to the relevant legislation of the UK or an EU Member State and is not dependent on them being a national of that country.