UK Social Security Contributions for British Expats

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Your requirement to continue to pay UK National Insurance will depend upon which country you are going to, who your legal employer is and how long you expect to be away.

In the majority of overseas assignments, individuals continue to be employed by the UK company and are seconded elsewhere. In this situation, the requirement to continue to pay Class 1 NIC for a period is as follows:

  • if you transfer to a European Economic Area country, you may continue to pay into the UK scheme if either your secondment is under 12 months at the outset (but this may be extended for a further 12 months if the assignment is extended), or your secondment is under 5 years at the outset and the social security authorities in the host country agree. In both cases a form E101 should be obtained by your employer from the Contributions Agency International Services to certify continuing Class 1 liability. No liability should then arise in the host country.
  • if you transfer to another country with which the UK has a social security agreement, the it should generally not be necessary to pay contributions in both countries at the same time. The treatment will vary between countries, as some will deal only with reciprocation of benefits and not contributions. For the agreements that deal with contributions, the general rule is that contributions must continue in the UK for a defined period. This is normally one to two years, but can be as long as five (eg USA). When this period expires, contributions will cease in the UK and commence in the host country.
  • if you transfer to a country which other than the above, you are obliged to pay Class 1 NIC under UK law for a period of 52 weeks following your departure. At the end of the 52 week period, Class 1 contributions should cease. This could result in a UK and overseas liability during this period.

It is often advisable at the end of the period of compulsory Class 1 contributions to continue to pay Class 3 contributions to maintain your entitlement to certain benefits, notably your basic state retirement pension. However, if you go to a country where a reciprocal social security agreement exists, you may find that such contributions are unnecessary.

 

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