What happens after Brexit? Self-employed National Insurance changes explained

Brexit has dominated headlines across the world leading up to the 31st October. In the event of a no-deal scenario, there would inevitably be changes to the way self-employed UK citizens live and work in Europe (including the EU, EEA and Switzerland.)

While the UK government continues to work to reach a reciprocal agreement with EU member states, one of the largest anticipated changes revolves around social security contributions.

If a reciprocal arrangement is reached, it will only be applicable during the transition period, which runs until the 31st December 2020. As such, this is a factor that all self-employed individuals working in the EU, EEA or Switzerland will need to consider sooner or later.

Self-employed individuals face social security contribution changes

At present, the EU Social Security Coordination Regulations stipulate that social security contributions (such as National Insurance in the UK) only need to be paid in one country at a time – i.e. where the individual is ordinarily resident. This coordination agreement will end, should the UK leave the EU without a deal.

This would have a financial impact on self-employed UK nationals in the EU, as well as EU nationals in the UK. It’s important to note that if the individual has a UK-issued A1/E101 form, they will continue to pay UK National Insurance contributions for the period shown on the form.

HMRC has outlined the below steps to help self employed workers to prepare for a no-deal Brexit scenario:

“…self-employed workers may need to make social security contributions in both the UK and the EU, the EEA or Switzerland at the same time.

• if the end date on the form goes beyond the day the UK leaves the EU, they will need to contact the relevant EU / EEA or Swiss authority to confirm whether or not they need to start paying social security contributions in that country from that date – the European Commission’s website will help them find the relevant country’s authority

• if they are a UK or Irish national working in Ireland, their position will not change after Brexit as they will be covered under the international agreement signed by the UK and Ireland in February 2019 – they won’t need to take any action

• a replacement for the A1/E101 form will be issued for new applications after Brexit, this ensures they will continue to make UK National Insurance contributions to maintain their social security record – they can still use the same form on GOV.UK to make an application after Brexit.

If you are a self-employed individual living and working in the UK, our contractor advisors are on hand to assist you. Contact us using the form below to find out more.

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