Post Brexit: Key HR considerations of remote working in the EU

Remote working looks set to remain, and for many, has become a normal and desired part of working life. Some employees have used the increase in remote working as an opportunity to work away from home in holiday homes or have even relocated to other countries in search of a better lifestyle.


Some countries are actively encouraging remote workers. Barbados, for example,
recently launched The Welcome Stamp in response to the Covid-19 pandemic,
allowing nationals from other countries to live and work there for a year while
doing their jobs for employers in other countries.


Similar options are also available within the EU. However, the UK’s recent departure
from the EU has meant there are legal implications that must be considered by HR
for any employees operating remote working in a European country.


Before 31 December 2020, if an employee was a UK and EU citizen, they had the
right to live and work in another EU member state. This, however, changed for UK
citizens when the Brexit transition period ended. Organisations will now need to
decipher the employment law and immigration implications of such a move and
how it impacts their business.


So, what are the risks?


Social Security

Social Security treatments differ to tax, meaning Social Security may be due
(employer and employee) on earnings.


Individual Tax Return

An employee working outside of the UK may trigger personal tax filing and
registration obligations with Local Tax Authorities.


Corporate Issues

There may be a risk that an employee creates a sufficient presence in the
foreign country making it liable for local corporate taxes or value added tax
(VAT). Although most countries are sympathetic to travel restrictions, BDO
highlight ‘the longer the travel restrictions remain in place, the greater the risk
is likely to be in this area” (1).


Immigration Considerations

An employee who intends to work in another jurisdiction must hold the correct
right to work documents, visa, or work permits for the respective country.


Employment Law

A UK employee working abroad will likely continue to be subject to national
employment laws. However, there is a risk that the employment laws of the
host country may also apply. For example, national minimum wage, pensions,
holidays, redundancies, to name just a few.

Although the above are some of the main legal risks, many other individual
considerations must not be ignored. Businesses must continue to support
employee well-being, upskilling, and development, implementing strategies
that work both in the workplace and remotely.

Building a workforce of global, diverse, and remote talent is a compelling
argument for any business as it offers a genuine solution to today’s war for
talent and embraces a new way of working. That said, it is important to note
that working in breach of any of these risks can have a serious consequence
for both individuals and businesses.


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(1) Accountants and Business Advisors (2020) Article: Corporate tax residence and COVID-19. BDO United Kingdom Insights, 27 April. Available here