Marcin is the marketing director for Europe, Asia and Africa at a large multinational technology company. He is employed in London, but spends a lot of time traveling around the world. He lives in Poland and is a tax resident there, and Brexit will have a big impact on his contract.
Where should he pay his National Insurance Contributions (equivalent to Polish ZUS)?
It is with this problem that Marcin came to us. The case was not simple, because analyzing tax regulations I could not focus only on the British ones, but I also had to take into account the Polish and EU tax and legal codes. The rule of thumb is that both Polish and British tax regulations must be modeled on the EU's:
Regulations are of general application, binding in their entirety and “directly applicable” in all Member States.
So I started with Article 13 of EC Reg No 883/2004. This article, however, does not give us a direct answer - it says that National Insurance Contribution (i.e. the equivalent of Polish ZUS) is paid where the "substantial part" of work takes place. But how do you define a "substantial part"? European law leaves the interpretation and implications directly to the law of a given Member State.
So I reached for Social Security (Contributions) Regulations 2001 reg 145 and 146.
British regulations allowed me to classify Marcin's workplace - According to SSCR 2001, he turned out to be a British worker:
1. he spends most (over 25%) of his working time in the UK,
2. the company has no physical headquarters in Poland, and while in Poland, Marcin works from home,
3. the agreement between Marcin and his employer specifies that his main place of work is London,
4. Marcin is not seconded to the Polish branch - such a branch does not even exist, and the company has offices in Europe only in London and Dublin.
Polish law is very similar in this respect - for confirmation, we contacted our partners in Poland who confirmed the results of our legal analysis.
Marcin thus submitted an application for an A1 certificate to the HMRC in order to confirm that he is indeed subject to the provisions regarding the payment of NI contributions in the UK.
The question remains whether when the UK leaves the European Union the old international agreements will be revived, or will any new agreements be concluded between the United Kingdom and the Union. As of today (12 February 2020) Marcin's situation looks as above.