How to avoid paying Social Security in two countries

Do you work overseas? Are you in danger of paying social security contributions twice?

If you’re an employee or if you’re self-employed, and you’re working overseas, there’s a danger that you’ll find yourself paying your social security contributions (Called National Insurance or ‘NI’ in the UK) twice, ie social security contributions in the overseas country and NI contributions back in the UK. Whether or not you need to pay these in both countries depends on many things, like where you’re working, the nature of your work and how long you’ve been working there.

How to avoid to pay social security in two countries

Portable documents to avoid paying NI twice

If you’re working overseas, then HMRC will give you a certificate that will enable you to avoid paying a social security contribution in your host country. In a European Economic Area country, this usually is a Portable Document A1, (formerly called an E101 or E103). Form A1 is a ‘Statement of Applicable Legislation. It proves that you pay social contributions in another EU country. For countries outside the EEA, HMRC will usually give you a certificate specifically for your host country (except for New Zealand).

To keep the process as simple as possible, it’s always advisable to apply for the document before you leave the UK.

How to avoid making social security payments in the host country

To avoid paying social security contributions in the host country, you must:

  • have been self-employed in the UK for at least two months before starting your employment abroad.
  • be able to demonstrate, for example, by producing copies of contracts, details of the work to be carried out abroad.
  • be able to show that you can maintain in the UK the conditions enabling you to resume your work back in the UK. Examples of this could be retaining relevant office space infrastructure or having a VAT number and registration with the chamber of commerce or professional bodies.

If you’re an employee planning to work abroad, you can find more information here on the basic National Insurance rules.

If you are self-employed, then you can read the corresponding information here.

How to avoid making social security payments in the host country

Help for employees or self-employed people working overseas

AccountsCo offers a full array of support for both personal and company tax. To find out more, please get in touch.

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