The role of a Financial Director – a life in the spotlight
The House of Commons has voted to reject the House of Lords amendment which sought to guarantee the rights of EU nationals resident in the UK before Brexit negotiations begin. This paves the way for Article 50 of the Lisbon treaty to be triggered later this month, when the two year negotiation process will begin for the UK to leave the European Union. Although this two year period can be extended with the agreement of all 27 members, it is unlikely in reality that this will be achievable. Whilst the government has stated that negotiations regarding the rights of EU citizens will be a priority once Article 50 is triggered, until this issue is decided many EU nationals will remain in limbo in the UK with on-going uncertainties regarding whether or not they can continue to reside in the UK.
This will come as a blow to many employers of EU migrants who now continue to face uncertainty as to whether their EU workforce will continue to have residency rights in the UK.
There are strong indications that the government will grant permanent residence to those who have resided in the UK for at least five years as a qualified person, i.e. as a worker, self-employed, self-sufficient, student or job seeker prior to a yet to be determined cut-off date. This could be when we eventually leave the EU but there is a strong possibility it could be as soon as the date of triggering Article 50. It has been widely reported in the press that the cut-off date will be when the government triggers Article 50 and indeed this date has been recommended in a report by British Future published in December 2016.
To ease employees concerns you may wish to conduct an audit of your EU employees and family members of EU nationals to ascertain whether they can meet the five year residency requirements.
As part of this process employees should be encouraged to collect documents evidencing their status as employed, self-employed, a student or self-sufficient. It is important to note that the five year qualifying period can consist of periods of stay consecutively in any of these categories. For any period when the employee was a student or self-sufficient they will need evidence that they held comprehensive sickness insurance. Employees will also need to show that they have not spent more than six months outside the UK in any 12 month period over the five years relied on. On this point, where an employee has resided in the UK in excess of five years, they can use a five year period where they can easily meet the qualifying conditions with supporting documentation and can show they have not been absent from the UK for more than two years after the five year qualifying period chosen.
Alternatively, employers could await the outcome of the negotiations to be conducted by the government and in the meantime their EU employees’ rights to live and work in the UK will continue until Britain leaves the EU and during any agreed transitional period.
Individuals can apply to the Home Office for a registration certificate or, if they have already been in the UK for five years, a document certifying permanent residence. These documents do not in themselves confer any rights but are evidence that the government has acknowledged the individual is exercising their right of residence or has acquired permanent residence.
If an individual has been living in the UK for at least six years, they could consider applying to the Home Office for naturalisation as a British citizen. This can only be done after obtaining a document certifying permanent residence. Before applying, individuals will need to check whether their country of origin permits dual nationality and whether it will impact their tax position. If they have any non-EU family members, eg spouses or dependant relatives, becoming British could impact on their ability to rely on the individual’s EU rights and so advice will also need to be taken on this.
Individuals could also consider applying for a British passport for any child born in the UK. A child born in the UK on or after 30 April 2006 to an EU citizen who acquired permanent residence before the child’s birth is automatically a British citizen, even if the EU citizen parent has never held a document certifying permanent residence. Different rules apply for children born before this date but they could be eligible to be registered as British.
Should your organisation wish to receive advice on any of these issues, Kingsley Napley would be happy to conduct an audit at your premises and provide a drop-in surgery for your EU employees. Please contact a member of our team for further details.
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