What if I am a multi-state worker?
Prior to the UK’s departure from the European Union (EU) on 31 January 2020, the social security system of the UK was co-ordinated with that of the rest of the EU, Norway, Iceland, Liechtenstein and Switzerland, such that generally you were only liable to social security in one country at any one time. These rules continued to apply until 31 December 2020 and for some individuals they will continue beyond that date. From 1 January 2021, a new protocol on social security coordination applies between the UK and EU member states.
Both sets of rules include similar provisions about the country where you must pay social security if you work in both the UK and another country within scope of the relevant agreement.
If you carry out more than 5% of your work in a second country, you are considered a ‘multi-state worker’. In this case, you normally pay National Insurance contributions (NIC) or social security contributions in the country that you are resident in, provided that you also perform ‘substantial’ duties in that country.
Residence is defined for social security purposes as the place where a person habitually resides, that is the place where the employee has the strongest personal connections.
‘Substantial’ is defined as being no less than 25% of working time and/or remuneration. So, if you work in both the UK and also in your home country, you will still be insured in your home country rather than in the UK, so long as you spend at least 25% of your working time there and keep the relevant social and economic ties.
Where you are not performing a substantial part of your activities within your home member state (state of residence), the position is generally that you pay into the social security system of the member state where your employer has its ‘registered office or place of business’.
If you are unsure where you should pay social security, HMRC may be able to help determine the position. There is a form that you can complete to send to HMRC, on GOV.UK.
There is also further information on the EU website.
You can find a list of the EEA countries on our page EU and EEA countries.
If your work location changed between the UK and the EU solely as a result of coronavirus-related travel restrictions, HMRC said they would disregard this change until 30 June 2022 when deciding whether National Insurance contributions were due in the UK. However, we understand HMRC and the EU have since agreed that where the work location has changed due to the coronavirus pandemic, this can be disregarded until 30 June 2023. From 1 July 2023, this relaxation ends and your position will be determined in accordance with the rules described above.