Where do I have to pay national insurance when relocating and working abroad?
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Some people travel with work across borders.
Some people choose to work remotely or as nomads across borders.
Some people have work that requires them to be based overseas for a fixed contract period.
If you are working for a UK employer and working abroad, do you need to register and pay tax overseas?
RESIDENT
When tax resident in a country working you have an income and social insurance tax liability to pay.
In the UK Social Insurance taxes are called National Insurance. In this article tax resident means for earnings that are liable for income and social/ national insurance taxes.
In a more general sense you can remain ordinarily resident in a country if you’re home, family and business interests are centred there…. even if you are living and working abroad.
TRAVELLING
If you have a UK based employer, and you are travelling or spending part of the year abroad you could remain a UK tax and National Insurance payer.
Generally this only applies if you spend less than 183 days in another country.
That is because if you spend more than half the year in one other country you become liable to be a tax resident there.
If your employer sends you abroad to travel and work with only short stay business trips in any one country, then you remain a UK tax resident for the whole year.
REMOTE
If you choose to work remotely in another country for more than 6 months a tax year then you would be considered to be ordinarily resident in that expat location and liable for local tax and social insurance.
Nomad working is ‘in between’. If you don’t spend more that 6 months in one country, then you would always remain tax resident in your home country, or your last country of tax residence.
TAX BENEFITS
While you remain UK tax resident for worldwide earned income you still remain entitled to UK healthcare NHS, child benefits, maternity allowance, bereavement allowances and others benefits.
If you start paying into another tax system your can earn benefits from scratch with your entitlement subject to the local rules of that country.
In some countries there is no state social insurance welfare, in which case expats rely on private health insurance benefits.
AGREED
The UK has around 47 social insurance agreements in place with other countries including Ireland, the EU, EEA, plus 16 other countries including the USA.
These agreements allow citizens of the UK and these other countries, who are employees taking an overseas contract to work abroad for up to 2 years, or receiving state pensions, to obtain a certificate to transfer their social insurance and healthcare entitlements to their new country of residence.
Using a UK Global Health Insurance Card (GHIC) or UK European Health Insurance Card (EHIC) allows travelling and short stay remote workers to receive essential health care when travelling. GHIC’s and EHIC’s are valid for emergency health care only not routine treatments.
When a social insurance contribution is made in another country those years can be used as credits in your other country when claiming credits toward a state pension.
PLAN AHEAD
Expats living and working abroad can maintain pension, healthcare and social benefits when working remotely across border.
Taxes are to be paid anyway so it’s important to check and validate your entitlement.
ProACT Partnership offer advice and guidance to expats working abroad in the UK, EU, EEA and around the world.
Need help & guidance? Contact us.
Further reading
UK State Pension for Expats: Ensuring Your Financial Security