Social Security

United Kingdom | UK/India Social Security agreement—transitional arrangement

Summary

HMRC have announced a new transitional arrangement on 7 October 2026 in respect of the UK/India Social Security agreement, impacting individuals who were already on temporary assignment at the point the agreement came into force on 15 July 2026.

The detail

The long-awaited UK/India Social Security agreement took effect as of 15 July 2026.

For individuals who were already on temporary assignment between the UK and India as of 15 July 2026, the agreement confirmed that such individuals would not be eligible for a Certificate of Coverage for the remainder of their assignment.

• UK outbounds—where an individual was within the 52-week liability period, this would end immediately on 15 July 2026 and only Indian Social Security being due.
• Uk inbounds—where an individual was within the 52-week exemption period, this would end immediately on 15 July 2026 and only UK National Insurance being due.

As of 7 October 2026, HMRC have confirmed that employees may continue to benefit from the 52-week exemption or liability in its entirety, rather than have this cut short on 15 July 2026.

• UK to India—employees may continue paying UK Class 1 NIC for the remainder of their original 52-week liability period. A Certificate of Coverage must be obtained for the remaining period. Once the 52-week period has elapsed, Indian Social Security will apply if the assignment continues.
• India to UK—employees can continue to benefit from the original 52-week UK NIC exemption and remain subject to Indian Social Security. A Certificate of Coverage is not required in this situation.

Example – UK to India

Nick moved from the UK to India on 1 January 2026. Under the transitional arrangement, Nick or the employer can apply for a Certificate of Coverage so that UK Class 1 NIC continues until 31 December 2026. If Nick remains on assignment after this date, Indian Social Security will apply from 1 January 2027.

Example – India to UK

Raj moved from India to the UK on 1 January 2026 and qualified for the 52-week NIC exemption. Raj can continue to remain subject to Indian Social Security and be exempt from UK NIC until the end of the original 52-week period. Raj/his employer does not need to obtain a Certificate of Coverage. If Raj remains on assignment after this date, UK NIC will apply from 1 January 2027.

What is next

For existing UK outbounds to India, obtaining a CoC for the remaining part of the original 52-week period appears to be optional. Employers can therefore consider whether continuing UK NIC or remaining with the position adopted from 15 July 2026 is more appropriate.

For existing India outbounds to the UK, the original 52-week UK NIC exemption will continue.

In both scenarios, the practical steps are likely to be:

• Review your affected population and confirm each employees original 52-week end date.
• For UK outbounds, apply for Certificates of Coverage up to those dates (where appropriate) and continue Class 1 NIC for the duration of the 52-week period.
• Seek payroll adjustments for any overpaid UK NIC, or refunds of Indian Provident Fund contributions where necessary, particularly where changes were processed as of 15 July.

For UK outbounds, whether obtaining a Certificate of Coverage is worthwhile will depend on individual circumstances, including how long they remain on assignment after 15 July, and whether sufficient UK NIC has already been paid to secure a qualifying year for UK state pension purposes.

The transitional arrangements have been confirmed several months after the agreement took effect. For support with any of the above next steps, please reach out to us below, or via your usual Vialto Partners contact.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Alan McAllin
Director

Craig Smith
Senior Manager

Paul Eades
Senior Manager

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