United Kingdom – Clarifications on Social Security Agreement with Republic of India

Key Highlights

Transitional Rules

The DCC will not apply to individuals who are already on assignment on the day the agreement enters into force. U.K. employees who are already working on assignment in India will not be entitled to a Certificate of Coverage and will become subject to Indian social security legislation, even if they are paying U.K. social security by virtue of the U.K. domestic 52-week liability rule. In the same manner, Indian employees who are already on assignment in the U.K. will become subject to U.K. social security legislation, even if they are within the first 52 weeks of the assignment and exempt from paying U.K. social security contributions under U.K. domestic law.

Detached Workers

• Certificate of coverage eligibility: The U.K. and India have agreed that to benefit from a Certificate of Coverage and remain insured in the home country social security scheme, employees must have been subject to the legislation of the home country for at least 30 days prior to their assignment in the host country or  employer and employee contributions must have been paid in respect of the employment for the calendar month before the start of the assignment.
  
  
• Assignments from third countries: An individual who is sent by their employer on assignment to the other state from a third country can still be entitled to a Certificate of Coverage, as long as they are paying social security contributions in their home country immediately before the start of the assignment.
  
  
• Personal choice: An individual who personally decides to work temporarily in the other country can still be entitled to a Certificate of Coverage, as long as their employer agrees to this. There is no requirement for a formal assignment to be in place.
  
  
• Cooling-off period: If an individual completes an assignment and is subsequently sent to work in the host country again, they are not entitled to a Certificate of Coverage until a period of six months has elapsed. If their previous assignment was shorter than six months, the “cooling-off period” will be the same length of time as the previous period of work in the host country.
  
  
• Exceptions: The competent authorities of both states may agree on exceptions for particular individuals or categories of individuals. In exceptional situations, this could allow employees to remain within their home‑country system for 36 months, providing that a request for an exception is made, wherever possible, in advance.

Special Categories of Workers

• Mariners: When an individual is working as an employed person on board a vessel at sea flying the flag of either the U.K. or India, that activity is to be treated as conducted in the country whose flag the vessel is flying.
  
  
• Aircraft crew: When an individual is employed as a member of the flight or cabin crew transporting freight or passengers, the legislation applicable to them is determined by the location of their home base. Home base is defined as “the place from where the crew member normally starts and ends a duty period or a series of duty periods, and where, under normal conditions, the operator/airline is not responsible for the accommodation of the crew member concerned.”
  
  
• Government employees and armed forces: Individuals in the service of the government or members of the armed forces working in the other state remain subject to the social security legislation of the state where the administration that employs them is based.
  

Voluntary Contributions

• Individuals who are subject to the legislation of the U.K. or India are not entitled to pay voluntary social security contributions under the legislation of the other state for the same period.  
• Individuals who are already on assignment from the U.K. to India on the date the agreement comes into force, who will become subject to the Indian social security legislation, will not be entitled to pay voluntary U.K. social security contributions.

Split Social Security Liability

As the DCC does not contain specific rules for individuals working simultaneously or alternately in both countries, HMRC clarifies that individuals employed in both countries may be liable to pay social security contributions in both the U.K. and India, regarding earnings from their respective employments in the U.K. and India.

Example

Chris is ordinarily resident in the U.K., employed by an employer based in the U.K. and carries out this employment two months in the U.K., then two months in India on a rolling period. 

As Chris is normally employed in both the U.K. and India for the same period, his liability to pay contributions on these earnings is determined under the legislation of the country where the work is carried out. This means that Chris will be liable to pay U.K. social security on the earnings earned in the U.K. and contributions to the Indian social security scheme on the earnings earned from work in India. 

It is unclear if in this scenario Chris could obtain Certificates of Coverage for each work period in India.

Entry into Force

The DCC will take effect the day after both countries exchange written confirmation that domestic legal requirements have been fulfilled. HMRC suggests that it is expected to enter into force by summer 2026.

Contacts