A1 Certificate from HMRC in order to do work in the EU

[Neptune]

Wanted to know if others have came across this.

I recently setup my own Ltd Co in the UK and have signed contract with a UK agency to pay my Limited Co a rate for a job in Ireland for a period of 6 months.

Agency says in order to me compliant, I must produce an A1 Certificate immediately to indicate that I am paying National Insurance.

HMRC has declined my application since I am not registered as Self Employed, I work for my own Limited Co in the UK, even though the work is in Ireland. My accountants say that early in 2019 they will submit a tax return for me and at that stage I will pay the appropriate Nat Ins and that the agreed rate should be paid to my Limited Co now without the immediate need for the A1 Certificate.

Has anyone dealt with this?

thanks!

[Manic]

A quick google

https://www.gov.uk/government/public...ic-area-ca3837

Halfway down:

If you’re a director of your own limited company you should complete forms CA3821 and CA3822.

Which leads to:

https://www.gov.uk/government/public...-abroad-ca3821
https://www.gov.uk/government/public...ic-area-ca3822

Looks a legit requirement.

[Sue B]

Hi Neptune,

The A1 is a posted worker certificate, so the eligibility criteria is based both on you as the employee and on the company.

Whilst there are quite a few reasons why it may be declined, in my experience, for UK PSC employees it's for one of two reasons.

1) From a company point of view, it needs to have a significant trading presence in the UK, i.e. approx 25% of the company income is earned in the UK, concurrently with the overseas stuff. If you have only just set up the company, and have no other UK contract running at the same time as the Irish work, then the significant trading presence will be hard to prove.

2) On the employee, you must have been paying class 1 NI contributions immediately prior to posting. If you have set your salary below the lower earnings limit and not paid a class 1 contribution recently this might be a reason why.

Please also pay attention to the tax rules too as these are more complex and if you are delivering your services to a client who has a permanent establishment in Ireland then you are taxable in Ireland from day one.

Additionally there is no 183 day rule for companies (only individuals) and you will need to look into the taxation of your business profits.

There is a topic in Accounting/Legal "Working In Europe - A Brief Guide" which would be a good place to start.

HTH

[paulchambers061]

I think i'm in the same boat ...

recently set up ltd company and got an accountant. got a contract in the eu.
agency had some compliance tasks, including the a1.

the accountant setup a paye for me, and I posted off the ca3821/ca3822 forms.
rejected by hmrc after 3 months...

before setting the company up I was made redundant at an IT company and spent several months without work, so no ni contributions in between.
even though I spend 2 days a week at home working for the client, I would guess that doesn't count as significant uk activity.

So, do I just bite the bullet and tell the agency I won't be getting an a1 from hmrc (I have appealed to them anyway).
and also, it it just ni/social security tax, or all tax?

thanks.

[Sue B]

recently set up ltd company and got an accountant. got a contract in the eu.
agency had some compliance tasks, including the a1.

the accountant setup a paye for me, and I posted off the ca3821/ca3822 forms.
rejected by hmrc after 3 months...

before setting the company up I was made redundant at an IT company and spent several months without work, so no ni contributions in between.
even though I spend 2 days a week at home working for the client, I would guess that doesn't count as significant uk activity.

So, do I just bite the bullet and tell the agency I won't be getting an a1 from hmrc (I have appealed to them anyway).
and also, it it just ni/social security tax, or all tax?

thanks.

Well sometimes appeals do work, however, there needs to be a really compelling reason for them to change their mind, and i would have thought the rejection for you came because of the lack of trading presence, not the lack of NI contributions, as being out of work is an acceptable reason not to pay them.

Even if you do get the A1 accepted, please note it is only to cover NI contributions and tax is another matter altogether. You need to look at where the work is performed, and who is the economic employer. This will be whoever ultimately bears the cost of hiring you, so not your PSC, not any intermediary, but the end client. If the economic employer has a permanent establishment in the country where you work, you will be considered taxable on that income in that country from day 1.

HTH

[m0n1k3r]

Wanted to know if others have came across this.

I recently setup my own Ltd Co in the UK and have signed contract with a UK agency to pay my Limited Co a rate for a job in Ireland for a period of 6 months.

Agency says in order to me compliant, I must produce an A1 Certificate immediately to indicate that I am paying National Insurance.

Social security (national insurance in the UK) is regulated across the EU so that a person should only have to be registered for social security in one country at a time (the UK tend to ignore this). The A1 certificate simply says in which country you are registered for social security for those cases where your employer (e.g. your own limited company) sends (posts) you to another EU member state to work there for a limited time, or where you have several employers in different countries. There is a wealth of guidance about this on the EU Commission website.

In general, companies are thought of being more than one person. The management sits firmly in one country (say, the UK) and have employees (such as yourself) who works for customers in various countries. Micro entities where actual company management moves to where the customers are and where work is performed (as is the case with one-man businesses) is not a good fit for this. It is assumed that one-person businesses are not companies, but self employed (as one-man contractors actually tend to be in most EU countries, save for the UK and Ireland). If you were instead self employed in the UK and would send yourself out to work for a customer in Ireland, then you would have no trouble getting an A1 certificate.

HMRC has declined my application since I am not registered as Self Employed, I work for my own Limited Co in the UK, even though the work is in Ireland. My accountants say that early in 2019 they will submit a tax return for me and at that stage I will pay the appropriate Nat Ins and that the agreed rate should be paid to my Limited Co now without the immediate need for the A1 Certificate.

Without an A1 certificate that makes it clear that you would pay NI in the UK, your employer (e.g. your limited company) might have to register as a foreign employer in Ireland and make PRSI etc contributions there.

Some good information here: Posted workers

As Sue writes, this is for social security/national insurance only. Tax is a different matter altogether that is based on double-tax treaties between countries rather than on EU regulations.

Always bear in mind that when you operate through a company or some other legal entity, the company is not "you" and there are in fact two separate entities involved - the employer (your company) and the employee (you). You might call yourself a director, but as soon as you do anything else than sit in board meetings and work on the company's long-term strategy, you are in fact an employee of your own company. All legislation and regulations are written based on this assumption.

Countries also tend to want to keep track of which foreign EU companies have posted workers to their country, mainly in order to uphold local workplace regulations. In Ireland your employer (your company) is supposed to report posted employees (e.g. you) to the Workplace Relations Commission: Posted Workers. No such reporting requirement or even facility exists in the UK.

[MarkjCox]

Looking for help on the same subject

I've been working abroad for the last 12 years and therefore have not paid UK tax or NI within that period. Prior to that, i had paid tax and NI contributions for 16 years,

I am looking to move back to the UK and I am in discussions for a job with a UK based company which will involve working in mainland Europe.

The potential employer is concerned I will not be eligible to obtain an A1 certificate having not had a recent history paying tax and NI.

Tried calling HMRC but not getting anywhere fast.

Any help or advice would be appreciated.

[SueEllen]

How often will you have to work in Europe? And for what periods?

[m0n1k3r]

I've been working abroad for the last 12 years and therefore have not paid UK tax or NI within that period. Prior to that, i had paid tax and NI contributions for 16 years,

I am looking to move back to the UK and I am in discussions for a job with a UK based company which will involve working in mainland Europe.

The potential employer is concerned I will not be eligible to obtain an A1 certificate having not had a recent history paying tax and NI.

Tried calling HMRC but not getting anywhere fast.

Any help or advice would be appreciated.

If you don't have or can get an A1 certificate then you will simply be liable to instead pay social security in the country where you work. That is the basic rule, and the A1 certificate simply provides an exemption from it. Following Brexit, there most likely won't be an A1 certificate to be had from the HMRC anyway. Ability to work in mainland Europe (assuming you don't mean Russia, Belarus, Ukraine or Serbia, which is pretty much the only countries not part of the EU or the EEA) without being an employee of a company based there might be questionable anyway.

[MarkjCox]

How often will you have to work in Europe? And for what periods?

Not 100% sure yet but possibility of doing a rotation of 10 on and 4 off for the duration of the projects. Projects would be in the region of 2-3 years.

I understand this has tax implications in regards to time spent out of the UK but i didn't think this was linked to the A1 certificate?

Thanks