Thinking ahead on touring costs

Clearly we will need to wait until after the General Election to understand the future direction of EU policy, but as things currently stand the UK Government will be negotiating reciprocal arrangements with the EU or Member States to maintain existing social security coordination for a transitional period until 31 December 2020. Individuals within these arrangements will only pay social security contributions in one country at a time.

In the event the UK ultimately leaves the EU without an agreement there are likely to be changes for UK arts organisations that employ people working in the EU, the EEA or Switzerland. Those involved with overseas filming or international residencies, or who have scheduled touring exhibitions or performances in those countries – sometimes years in advance – should consider now the potential implications of a no-deal Brexit.

Whilst political uncertainty remains, arts organisations will need to be prepared

While we do not anticipate an immediate impact on freedom of movement, social security changes could have an impact on organisations’ budgets.

Currently the EU Social Security Coordination Regulations ensure employers and their workers only need to pay social security contributions (such as National Insurance in the UK) in one country at a time. But if the UK leaves without an agreement, the coordination between the UK and the EU will end.

This will mean that employees working in the EU, the EEA or Switzerland may need to make social security contributions in both the UK and the country in which they are working at the same time. This in turn would mean a greater administration burden and potential pressure on salary budgets.

Whilst political uncertainty remains, arts organisations will need to be prepared, and the Government has issued guidance to help.

• If your employee is a UK or Irish national working in Ireland, their position will not change immediately after Brexit as they are covered under an international agreement signed by the UK and Ireland in February 2019.
• If your employee is currently working in the EU, the EEA or Switzerland and has a UK-issued A1/E101 form – a portable National Insurance document – they will continue to pay UK NI contributions for the duration of the time shown on the form.
• If the end date on the form goes beyond ‘Brexit day’, you will need to contact the relevant EU/EEA or Swiss authority to confirm whether your employee needs to start paying contributions in that country from that date.
• A replacement for the A1/E101 form will be issued for new applications after Brexit. This ensures your employee continues to make UK National Insurance contributions to maintain their social security record.

Until we have a better idea concerning the basis upon which the UK will leave the EU, organisations should make plans to ensure they are able to retain and recruit the talent needed for their tour schedules.

Nick Bustin is Director of Employment Tax at haysmacintyre.
haysmacintyre.com
t: 0207 969 5578
e: [email protected]

This article, sponsored and contributed by haysmacintyre, is part of a series of articles sharing insights into how organisations in the arts and cultural sector can manage their finances to maximise their commercial potential.