Brexit’s impact on your people

Solution

Brexit’s impact on your people

Being prepared despite the uncertainty

What does the Brexit mean for your global workforce? Is your business ready for the consequences of the Brexit from an immigration, (personal income) tax and social security perspective for the UK citizens in the Netherlands?

As a result of the referendum in June 2016, the United Kingdom will cease to be a member of the European Union as of March 2019. The United Kingdom is now in the final straight of Brexit. On 14 November 2018 at a special summit, the European Union approved both the draft withdrawal agreement and the political declaration on future relationships. In order for the agreement and declaration to be ratified, the UK parliament and EU parliament have to vote in favor of the deal.

The immigration terms of Brexit is crucial for the employers with a global workforce in the Netherlands. Although the extent of the effect is still unclear, the Brexit will have consequences for both the UK nationals who already live in the Netherlands and certainly for the UK nationals who arrive to the Netherlands in the post Brexit period.

For social security purposes, the terms of the Brexit are also still unclear. At the moment, EU regulations determine which country’s social security scheme applies to employees in cross-border situations, such as temporary secondments or cross-border commuters. If these regulations no longer apply to the UK as a result of the Brexit, the social security position of these employees will have to be determined on the basis of national legislation and/or bilateral social security treaties.

The Netherlands has a bilateral social security treaty with the UK, which is currently dormant for most cases due to the prevailing EU regulation. The outcome of the Brexit negotiations can go in various ways. In case of a hard Brexit, the EU regulation no longer applies to the UK. In that scenario the treaty will apply to all cross-border employees between the Netherlands and the UK. The rules in the treaty between the UK and the Netherlands are different from the EU regulation. To safeguard the social security positions of your employees, various actions may have to be taken.

For personal income tax purposes, we don’t expect any significant changes as the bilateral tax treaty with the UK remains in place. The tax treaty covers most of the (double) taxation issues which may arise for cross-border workers between the Netherlands and the United Kingdom.

Whilst a Deal-scenario is currently under discussion, a No Deal-scenario remains a strong possibility. As this remains the scenario of most change, our recommendation is to plan for every eventuality, including a “No deal Brexit”.

Deloitte monitors the progress in Brexit negotiations and is ready to navigate your business through the upcoming immigration, (personal income) tax and social security rules as a result of Brexit.

To read about UK citizen’s rights in case of no-deal Brexit, please click here.

Brexit toolkit People

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Marike Maas

Marike Maas

Partner

I design immigration strategies and support my clients in the execution of their immigration strategy, resulting in the legal deployment of their workforce at the right moment in the right location. M... More