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Brexit implications for the globally mobile and employing EU citizens

One of the founding principles of the EU is the freedom of movement for all EU citizens. Subject to any UK/EU agreement when the UK leaves the EU, the freedom of movement will also be lost. Clearly, this will impact employees and individuals travelling to and from the EU for business, with many employers already aware of the additional regulatory and visa requirements that need to be considered when posting a UK employee to the EU, or bringing an EU employee to the UK, after the 31 December.

Employees from the EU

The UK Government will also be introducing a new points based immigration system, which will include a focus on the job role and salary level of the EU employee. The UK employer will need to sponsor the employee and to do so will need to have registered as a sponsor and hold the appropriate licence by 1 January 2021 – Irish citizens and those under the EU settlement scheme are not affected.

Tax implications

In addition to the migration issues created by the loss of freedom of movement, there will be additional tax and social security issues to consider. The withdrawal from the EU means that those coming into the UK are no longer governed by EU provisions automatically entitling EU secondees to a UK personal allowance. Instead, the availability of a personal allowance in the UK will need to be decided based on the provisions of the UK’s double tax agreement with the individual country the employee is being posted from. Should a personal allowance not be available it will add additional costs in bringing the individual to the UK.

Social security implications

While the UK remains within the EEA, we are bound by the EEA provisions on social security. These provisions avoid employees and employers having a double social security charge where employees work in multiple EEA countries. Apart from the unilateral social security agreement with the Republic of Ireland, no agreement on social security has been reached with the wider EU. If no deal is agreed, employees and employers undertaking work in both the UK and the EU, could find they incur a double social security charge.

We will of course keep you updated on all of these issues.

FEATURING: Kayleigh Everson
Kayleigh advises both businesses and private clients on a range of tax matters specialising in residency and domicile, global mobility and general employer compliance. She… read more
FEATURING: Scott Campbell
Scott joined PKF Francis Clark in 2014, he is a chartered tax adviser and tax director in the employer solutions team. He specialises in all… read more
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