Social Security – The 52 Week Trap

BLOG1st Jun 2018

Recently, AAB were approached by an oil and energy company, with globally mobile employees, who wished to transfer their payroll from their current provider. As part of the implementation process a thorough review of the clients payroll process was undertaken.

At a first glance, we highlighted a number of employees who work in an overseas location with all duties being carried out overseas and no UK duties. Upon further review of their position, it became apparent that no consideration had been given to the social security position for these employees.

The employees had been sent to work in a location with which the UK does not have a social security agreement and is also not in the European Economic Area. As these employees were under a UK contract of employment, in this case the employer must calculate and deduct UK social security for the first 52 weeks in which their employee is working in the overseas location. After this initial 52 week period, the employer and employee have no obligation to pay social security however in this instance, contributions continued for a number of years.

In total the social security refund due exceeded £150k, which was purely made up of employee and employer contributions. AAB managed all correspondence with HM Revenue & Customs in order to secure the refund back to the appropriate parties, this included refunds directly as well as adjustments being made in year through the payroll.

If this is an area which your business would like to review or if you require guidance on your social security obligations, please contact Megan McDonald ( or your usual AAB contact for further information.

To find out more about our Payroll and Employment Taxes team, click here