26 January 2022

Employees posted to work in France before 31 December 2020 (and their employers) need to be aware of a HMRC notification, especially if they want to extend the period for which they pay UK social security rather than French social security. 

Since 31 December 2020, employees posted to work in the EU for up to 24 months can stay in the UK social security system and do not need to make social security payments in their host country. Where the posting is for longer than 24 months, from the start of the posting they are liable to social security in the host country.

Before 31 December 2020, however, an individual could be posted from the UK to an EU country and remain within UK social security for 24 months, with the ability to extend to five years in certain circumstances. The UK would notify the host country of an application to extend the period beyond 24 months, and both authorities would agree that UK social security was still payable. 

Under the Withdrawal Agreement, the old rules should still apply to individuals posted to the EU before 31 December 2020, and an extension of up to five years applied for after that date.

However, in late 2021  HMRC issued a notice that the French authorities dispute that UK social security is still payable in these circumstances after 30 June 2021 as a matter of policy. This means that the individual (and their employer) would be liable to the much higher French social security once their existing A1 certificate runs out.

HMRC does not believe that this policy is in line with the Withdrawal Agreement and are in talks with the French authorities to understand their position.

When HMRC receives an application to extend an A1 certificate beyond 30 June 2021 under the old rules, it will seek to reach an agreement with the French social security authorities in line with the terms of the Withdrawal Agreement. HMRC will only reach out to the French authorities if it is happy that the employee is covered under the Withdrawal Agreement.

Employees and employers looking to extend the A1 certificate to up to five years for a period beyond 31 July 2021 should be aware that the French authorities may demand that French social security is payable in the absence of a valid A1 certificate, even if HMRC believes that the employee should pay UK social security.

On Tuesday, 18 January 2022, HMRC announced that it has agreed with the French authorities to review the process by which these A1 applications are considered. In the meantime, the French authorities have agreed that individuals who have:

  • been UK-insured while working in France, but their A1 has expired; and
  • an application to extend their previous A1 up to five years currently under consideration by HMRC

should continue to pay UK National Insurance pending further advice from both authorities.

If you have any questions or concerns about NIC / social security and your globally mobile employees, please contact Jo Webber or Ian Jones, who can help you to review the position.