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Summary

  • The Common Travel Area and associated rights between the UK and Ireland will continue to operate and apply to Irish and UK nationals
  • EU nationals in the UK by 31 December 2020 will have the opportunity to retain their right to live and work in the UK by making an application under the EU Settlement Scheme* (The reference to EU nationals in this document also includes EEA nationals). The UK has reached a separate agreement with Switzerland in relation to citizens’ rights and service providers
  • Whilst free movement of people between the UK and the EU ended on 31 December 2020, an agreement has been reached which will allow certain contractual service suppliers and independent professionals to work for cumulative periods of up to 12 months. In addition to this, the agreement contains provisions in relation to short term business travel (for periods of 90 days in any 6-month period) and intra company transfers
  • The UK has introduced a new immigration system for those travelling to the UK from 1 January 2021. Irish passport holders do not need to apply for a work visa, however, if other EU nationals are travelling to the UK for work purposes, they are likely to require a work visa prior to travelling to the UK

Business Implications

EU Nationals living and working in the UK prior to 31 December 2020

Although Irish passport holders are not required to make an immigration application in the UK, other EU nationals living in the UK by 31 December 2020 should make an application under the UK’s EU Settlement Scheme* to obtain proof of their right to live and work in the UK. The scheme is set to close on 30 June 2021 and at this time it is unclear how the UK will treat those who do not make an application. It should be noted that the UK adopts a very strict approach in relation to those who do not make other immigration applications prior to deadlines or visa expiry dates. Based on this approach, if an application is not made, the EU national may experience difficulties in proving their right to live and work in the UK.

EU Nationals working in the UK, but living in an EU Member State prior to 31 December 2020

EU nationals who work in the UK but are defined under UK immigration law as “not primarily resident” there, should consider making an application for a Frontier Worker Permit* as they may be ineligible for an EU Settlement Scheme application. This application may be useful for frequent commuters to the UK and is broadly drafted in comparison to the EU legal definition of frontier working. 

EU Nationals entering the UK on or after 1 January 2021

Whilst free movement of people between the UK and the EU ended on 31 December 2020, an agreement has been reached which will allow certain contractual service suppliers and independent professionals* to continue working for cumulative periods of up to 12 months. This will benefit those in roles such as accounting, engineering, management consulting and medical services (amongst others). There are many more roles which may benefit from this provision, and as such employers should study this section in detail. Employers should also note that they will need to hold a UK Sponsor Licence* should they wish to use this immigration route for any EU nationals entering the UK.

The new UK immigration system became operational on 1 December 2020. For EU nationals who cannot avail of the provisions in Annex SERVIN 4 some limited activities (such as attending meetings and training) can be conducted in the UK whilst the person is a visitor. For people who are not in these categories they,  must apply for a work visa under the new UK immigration system. To be eligible for the new “Skilled Worker” visa*, the applicant must (i) work for a regulated “Sponsor”; (ii) meet certain English language requirements; and (iii) meet other criteria such as salary and skills thresholds.

The UK will not have a specific immigration route for job roles which are defined as “low skilled”. We note that some sector specific immigration schemes are due to continue (for example the Seasonal Agricultural Workers Scheme), however at the time of writing this scheme is only available to a small number of employers.

We also note that whilst it will be possible for nationals of certain countries to enter the UK without meeting the skill levels for a “Skilled Worker Visa” (e.g. on a Tier 5 Youth Mobility Visa), these immigration routes often contain a cap on the number of visas available each year or they can be very sector specific. As such, these immigration routes are unlikely to be a solution for employers seeking lower skilled labour in areas such as manufacturing, engineering and agri-food.

As a result, employers should familiarise themselves with the new UK immigration system (including the provisions in relation to contractual service suppliers and independent professionals), pre-assess whether business activities can be carried out as a visitor in the UK, ensure that HR/recruitment staff are sufficiently skilled to navigate the new requirements and criteria of various applicable visas, and adopt a recruitment strategy that accounts for the end of the free movement of people.

Employer obligations

A UK employer may apply to become a regulated “Sponsor” and obtain a UK Sponsor Licence*. Many UK employers currently do not hold this licence and employers who are new to sponsoring employees should note that there are a number of duties and obligations placed on licence holders by the UK Home Office. As such, employers should put systems in place to ensure their compliance obligations are met.

British passport holders living in the EU prior to 31 December 2020

UK nationals living in the EU should make an immigration application in the Member State they are exercising EU “treaty rights” in (a person may be exercising treaty rights by, for example, working or studying). The relevant application schemes vary by Member State and have differing opening dates, evidential requirements and closing dates.*

British passport holders travelling to the EU on or after 1 January 2021

Whilst UK nationals do not need to make an immigration application in the Republic of Ireland, UK nationals travelling to elsewhere in the EU will need to ensure they have applied for any applicable work visas.*

If the UK national does not come within the remit of Annex SERVIN 4 and they are travelling as a “business traveller”, they will be limited to spending 90 days in any six month period in the Schengen area.

Employers should note that the permissible activities that a “business traveller” may carry out will vary according to Member State, and we encourage businesses to pre-assess if business activities can be carried out as a visitor, under Annex SERVIN 4 or whether a different work visa is required. Employers should also consider Frontier Workers, assess whether their employees can avail of such applications and avoid visa costs in the various post Brexit immigration systems throughout the EU.

The agreement on contractual service suppliers and independent professionals* will provide some  relief to employers who send certain workers throughout the EU. However, employers should note that some Member States have exercised an “opt out” in relation to certain roles and as such the immigration process will vary depending on the job role and the Member State the UK national is travelling to. As such, the agreement, is sub optimal compared to free movement of people. Whilst certain employees will be able to live and work in the EU for cumulative periods of up to 12 months, employers will need to pre-assess whether the UK national’s job role is eligible for this immigration route and whether any specific Member State opt outs apply. We note that some employers will be disappointed that their job roles are not included on the list, and appreciate that those employers will need to change the way they operate, build in visa costs and processing times for UK nationals and place more emphasis on managing their mobile workforce.

British passport holders in the Republic of Ireland

At a recent meeting of the Specialised Committee on Citizens’ Rights, it was confirmed that UK nationals living in the Republic of Ireland may obtain an immigration document to confirm their right to live and work in the Republic of Ireland. The scheme to provide this was  set to open on 1 January 2021, and at this time it does not have a closing date. The introduction of the scheme is a mandatory requirement under the UK EU Withdrawal Agreement, and whilst UK nationals do not have to make this immigration application (due to the bilateral agreement between the UK and Ireland in relation to the Common Travel Area), the application may be useful in providing evidence of an applicant’s residence in Ireland for Irish citizenship applications.

Non–EEA family members of British passport holders in the Republic of Ireland

The rights of non-EEA family members of British passport holders will be impacted by Brexit if the non-EEA national lives in the Republic of Ireland on the basis of EU law.

Assuming the UK national is exercising EU Treaty Rights in the Republic of Ireland and the non-EEA national holds a valid Irish Residence Permit prior to 31 December 2020, the non-EEA national may avail of the Irish Residence Permit ‘card exchange programme’. This application will provide proof that the non-EEA national’s right to live and work in the Republic of Ireland is protected by the UK EU Withdrawal Agreement.

Since 1 January 2021, non-EEA family members of UK nationals are not able to live in the Republic of Ireland on the basis of EU law and a new pre-clearance immigration scheme for these non-EEA nationals has been  introduced. Applications can be made to Immigration Service Delivery within the Department of Justice.*

*Immigration applications

KPMG has immigration teams located in Northern Ireland, the Republic of Ireland and throughout the EU. As such, we are able to assist with each of the immigration applications set out above.

Social Security Coordination

The EU and the UK have agreed on a Protocol on Social Security Coordination within the TCA to take effect from 1 January 2021, intended to govern the social security position of individuals who move between the UK and the EU from that date. Individuals who had exercised their right to freedom of movement prior to the end of the Brexit Transition Period on 31 December 2020, in some circumstances, will remain eligible for coverage under EU Regulation 883/2004 on the Coordination of Social Security Systems (the EU Regulations), based on grandfathering provisions contained within the Withdrawal Agreement.

The new Protocol on Social Security Coordination applies to UK and EU nationals, and to third country nationals who are or have been subject to the social security system of either the UK or an EU country. It applies to the UK and all EU countries but does not apply to Norway, Iceland, Liechtenstein or Switzerland. HM Revenue and Customs have indicated that mobility between the UK and Switzerland, Iceland and Norway should be governed by the terms of the existing bilateral agreements between the UK and each of these countries. There is no agreement between the UK and Liechtenstein, thus UK domestic rules will apply.

Whilst the Protocol on Social Security Coordination provides welcome certainty to employers whose employees have multistate travel patterns, the EU country “opt-in” approach to posted workers which enables a posted worker to remain within his or her home country social security system for up to two years, was not envisaged in either the UK or the EU’s draft agreement. EU countries must notify the EU Commission whether they intend to opt in by 31 January 2021. This opt in approach may create issues for employers seeking to maintain home country coverage for posted employees in jurisdictions that do not opt-in, with the result that UK employees posted to their location will have to make social security contributions there from the start of the assignment, potentially increasing costs and fragmenting benefit entitlements. There is no equivalent to Article 16 of the EU Regulations in the Protocol on Social Security Coordination. Article 16 of the EU Regulations permitted home and host authorities to agree a position if it was deemed to be in the best interests of the employee. Most frequently, this was used to obtain home country coverage for postings/detachments of up to five years.

Going forward, the new Protocol on Social Security Coordination appears more restrictive in its operation and coverage than the old rules for employees moving after 31 December 2020, particularly for posted workers generally and more specifically those employees looking to move on postings of over two years – more will be known by 1 February about the wider EU picture, as any EU countries which do not opt in are automatically excluded from the new Protocol on Social Security Coordination.

Ireland is in an unusual position in that Ireland and the UK agreed a bilateral Convention on Social Security in 2019 which was ratified by Ireland in December 2020, as part of the Brexit Omnibus Act and is now in force.  (The Omnibus Act is discussed in more detail here).  The TCA provides that a bi-lateral taxation agreement can take precedence over the provisions in the TCA.

The bilateral 2019 Convention on Social Security between Ireland and the UK is more beneficial than the EU Protocol on Social Security Coordination. We understand that Ireland will opt into the Protocol on Social Security Coordination in the TCA. Clarity around the application of which agreement should apply in various circumstances is pending. Because the Protocol is more limited in scope than EU Social Security rules, there may well be instances where a liability to dual social security contributions arise, unless the employee's mobility arrangement is covered under a separate agreement between the UK and the relevant EU Member State / EEA country.

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If you have any queries on how Brexit will affect your business, please get in touch with our dedicated Brexit Response Team.

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