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"With a deal backed by the PM’s Cabinet, now is the time for companies to address the social security implications of Brexit."

Martin Muhleder - Global Mobility Partner, PwC

In a statement made by Theresa May at 19:20 (GMT) today, the UK Prime Minister confirmed the Cabinet’s support of yesterday’s Brexit proposal.

Assuming the final deal is approved through parliamentary processes, we expect there to be a transitional period from 29 March 2019 until 31 December 2020, under which current EU regulations will continue to apply to the UK, including the coordination rules on social security for assignees and business travellers working under arrangements starting before 31 December 2020.

This means that employers can continue obtaining A1 certificates during the transition period.

More detailed analysis of the proposed transitional rules can be found here.

After the transition period ends - or from 29 March 2019 if no deal is reached - we are yet to have clarity on what rules will apply. Likely, it will mean reverting to the (currently limited set of) bilateral agreements between the UK and member states.

In such a case, what are the consequences and how should employers prepare?

We recommend a four-step approach for HR, tax and mobility professionals:

  1. Understand your current population
  2. Identify key compliance requirements
  3. Prepare to brief your business stakeholders
  4. Communicate to your employees


  1. Understand your current population

Once EU regulations cease to apply, employers with UK inbounds and outbounds will need to familiarise themselves immediately with a ‘new’ set of rules - which, in reality, is likely to mean the limited suite of underlying bilateral agreements the UK had negotiated with individual EU member states, generally pre-dating the current European regulations.

  • Many agreements with key EU markets only allow for an initial coverage period of say 6 or 12 months (as opposed to up to five years under European regulations). A number also do not cover third-country nationals. This may result in assignees needing to flip into host country social security systems, which could be either cheaper (e.g. France to UK) or more expensive (e.g. UK to France) but will certainly entail complexities in registrations with authorities, payroll and accounting.

  • Other key markets (e.g. Czech Republic, Greece, Hungary, Poland, Slovakia) do not have agreements with the UK at all - which means returning to the domestic legislation on both sides (including potential double costs due to the complexities of continuing UK National Insurance liabilities for 52 weeks for outbounds).

Mobile employees will therefore trigger obligations in other countries after Brexit than what would have been the case before, which makes a population review a vital action.


  1. Identify key compliance requirements

Organisations need to be prepared to comply in a number of areas.

  • Some overseas authorities have blocked the issuance of A1 certificates past 29 March 2019 in anticipation of a no-deal Brexit while others accept the validity of A1 certificates after that date.

  • If the deal is blocked, it is unclear whether certificates which were issued to a fuller term will continue to be valid or will become ineffective on 29 March 2019 - either way, there will be an action for employers to identify affected individuals and apply for new certificates (if a bilateral agreement allows this)

  • If a certificate of coverage is not applicable or an agreement not in place, employers may have to prepare to comply with domestic legislation on registrations and withholding of social security contributions.

  • Without access to “multistate” provisions, it is possible that payroll obligations are triggered in more than one country and that a split may need to be operated according to the work pattern of individuals

  1. Prepare to brief your business stakeholders

HR, tax and mobility professionals are best-placed to advise the business on the staff cost impact of Brexit.

  • Stakeholders within your organisation - including line managers, local HR and finance functions -  will need to understand the cost impact of the changes, which they may need to accrue for.

  • At the same time, there will be opportunities to minimise cost through flexing assignment structures and contractual arrangements.

  • By costing out the differential in your main corridors of movement and reviewing their approach, mobility functions can support the organisation to minimise disruption.

  1. Communicate to your employees

State benefits is an emotive topic and there will be unprecedented changes to benefit entitlements once EU regulations cease to apply. Whilst in line with arrangements between the UK and other non-EEA countries with or without bilateral reciprocal agreements, this will be alien to today’s European workforce who is used to a high degree of mobility on the continent with reciprocal rights.

  • For example, a UK employee working in Poland for nine years would accrue some degree of Polish pensions entitlement through contributions, but a Polish employee working in the UK for the same length of time would be entitled to no UK state pension at retirement.

  • There will be more restrictions to access benefits such as unemployment and maternity/paternity allowances for UK employees in Europe.

  • Access to healthcare is likely to be restricted as European Healthcare Insurance Cards and S1 certificates will no longer be issued or valid, unless the UK Government steps in to provide additional reciprocal cover and the EU states sign up to this as these are mechanisms governed by European legislation.

Employers should pre-empt questions from their mobile population and consider their policy as to whether to support financially and practically with the consequences.

Let’s talk

For a deeper discussion of how these issues might affect your business, please contact your PwC Global Mobility Services engagement team, or, or