On 18 May 2026, the U.K. and the Isle of Man agreed to a new social security agreement (the “SSA”). The SSA will update the existing agreement that was concluded in 19771 and then updated in 2016.2
WHY THIS MATTERS
Whilst the 1977 and 2016 agreements focused on state pension and retirement, the new SSA3 will provide clarifications on determining which country’s social security system applies for internationally mobile workers.
The new SSA will operate in line with other social security agreements the U.K. has with other countries as it will include provisions applicable to posted workers, multi-state workers, self-employed individuals, and other categories of workers, such as mariners and flight crew members.4
Key Highlights
Provisions under the SSA
- Persons covered: The SSA applies to individuals who are, or have been, subject to the social security legislation of the U.K. or Isle of Man. Coverage is not dependent on nationality.
- Equality of treatment: Individuals covered by one country’s legislation will be treated in the same manner as nationals of that country for social security purposes.
- Certificates of coverage: Employees or employers should consider applying to the competent authority for a certificate of coverage confirming the applicable social security regime.
Basic provisions
General principles:
Under the SSA, an individual is subject to the social security legislation of only one country at a time. The default rule is the “pay where you work” principle (lex loci laboris), meaning that an individual working in a country is ordinarily subject to that country’s system.
Detached worker rules:
- An individual who is employed in one state by an employer normally operating there and goes to work in the other state, shall remain subject to the social security legislation of the state where the activities are normally conducted, provided the anticipated duration of such work does not exceed 36 months. The individual’s employer must either post or agree that they can temporarily work in the other state.
- This provision also extends to a self-employed individual who goes to perform a similar activity in the other state, provided that the anticipated duration of such activity does not exceed 36 months.
Exceptions:
The competent authorities of both countries may agree on exceptions for particular individuals or categories of individuals. In exceptional situations, this could allow individuals to remain within their home‑country system even if the duration of work in the other state exceeds 36 months.
Multi-state workers:
- An individual who normally works as an employed or self-employed person in both states shall be subject only to the legislation of the state in which they reside.
- An individual who normally pursues an activity as an employed person and an activity as a self-employed person in both states shall be subject to the legislation of the state in which they carry out their activity as an employed person.
Employer obligations:
An employer whose registered office is in the state other than that whose social security legislation applies must fulfil that state's social security obligations, including reporting and paying contributions, as if based there. The employer can arrange for the employee to fulfil these obligations on its behalf, but the employer remains ultimately responsible. The employer must notify the relevant authorities of this arrangement.
Entry into force
The SSA will take effect on the first day of the month after both countries exchange written confirmation that domestic legal requirements have been fulfilled. It will have effect in relation to the tax year beginning on or after 6 April next following the date on which it enters into force.
KPMG LLP (U.K.) INSIGHTS
The SSA will provide clarity on the applicable legislation for individuals working in the two contracting states and a standardized approach in line with other bilateral and multilateral social security agreements applicable to the U.K.
If individuals and/or their programme managers have any questions or concerns about the scope of the update, its application and potential impacts, and appropriate next steps, they should consult with their qualified professional or a member of the GMS team with KPMG in the U.K. (see the Contacts section).
ENDNOTES:
1 legislation.gov.uk, “The Social Security (Isle of Man) Order 1977.”
2 legislation.gov.uk, “The Social Security (Reciprocal Agreement) (Isle of Man) Order 2016.”
3 GOV.UK website, “New social security agreement between the UK and the Isle of Man - GOV.UK” published on 20 May 2026.
4 GOV.UK website, “Key information about the new social security agreement between the UK and the Isle of Man - GOV.UK” published on 20 May 2026.
Contacts
Disclaimer
The information contained in this newsletter was submitted by the KPMG International member firm in the United Kingdom.
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