Agencies need to be prepared ahead of A1 certificates end date

a1 certificate end date

17th December 2018

Here at 6CATS, we’re committed to sharing our knowledge of the latest developments in international compliance in order to make recruitment agencies aware of the challenges they will face when placing contractors overseas. At a time when the furore and confusion around Brexit are reaching new heights, firms will need to ensure that the compliance solutions that their contractors are using are still legal following the UK’s withdrawal from the Union. With France, Germany and HMRC all stating that they will be ceasing the issuance of A1 certificates going beyond the 29th March 2019, the uncertainty of the landscape necessitates a diligent approach.

What is an A1 certificate?

A1 certificates are meant for the clarification of which social security legislation applies to an employed or self-employed person who chooses to work in another EU country. Under the EU rules the A1 form stipulates that an individual is only subject to the legislation of one country at any one time and has no obligation to pay social security contributions in the second country.

What does it mean for contractors and agencies?

For individuals within the scope of the regulations, this will affect which social security scheme applies to them, in terms of where contributions are payable and also where they are entitled to state benefits. For agencies, this climate of ambiguity will make it much more confusing as to the legality of the compliance solutions that contractors are using, and the likelihood of a firm suffering from the fallout of contractors unwittingly breaking the law will be much higher. Agencies, therefore, will have to be extremely cautious about which compliance solutions that contractors are using both now, and after the 29th of March, particularly in relation to those using their UK limited company overseas.

Can’t afford to do nothing

With the UK’s exit from the European Union drawing closer every day, a huge amount of uncertainty lingers around every aspect of our withdrawal. The lack of clarity around European social security legislation, along with the actions of France and Germany has made an already confusing situation even more puzzling. With other countries looking to follow suit, this is not going to get any easier! Unfortunately, agencies cannot afford to sit on the fence and ‘wait and see’ how the situation develops, as doing so could result in serious negative ramifications. This is why we advise companies to seek professional help in this area and leave the potentially treacherous territory of international tax and compliance to someone that understands exactly what to do.

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