An Introduction to the EU Settlement Scheme

As the deadline for applications under the EU Settlement Scheme (EUSS) rapidly approaches, you may be wondering how your business may be affected. 

This article is a broad introduction, not legal advice and as such, if you have any specific concerns, you should seek independent legal advice.

The EUSS is a programme designed to allow (eligible) citizens of various countries rights to live and work in the UK, as well as access healthcare, education and so on.  As always, the regime comes with its own jargon, but hopefully this guide will help demystify things.

Firstly, despite the name, the EUSS isn’t limited to the European Union (EU) but actually covers the entire European Economic Area – essentially EU member states plus Iceland, Liechtenstein and Norway – as well as Switzerland.  Irish citizens are excluded from EUSS as they continue to enjoy rights of access.

The deadline for application under EUSS is 30 June 2021.  Applications are made individually via the Home Office.

Successful applicants will receive one of two statuses:

  • ‘Limited leave’ or ‘pre-settled status’
  • ‘Indefinite leave’ or ‘settled status’

Very simply, an individual who has lived in the UK for less than 5 years can apply for pre-settled status.  Once they have lived in the UK for 5 years, they can apply for settled status.  Naturally, someone who has lived in the UK for 5 years or more can apply for settled status.

Functionally, either status allows the individual to live and work in the UK for the time being.  Over the next few years, those with pre-settled status will be expected to either transition to settled status or leave the UK.

The Home Office has issued guidance for employers to help them navigate their own obligations under the EUSS, which we recommend you read.

The Equality Act 2010 and Existing Employees After 30 June 2021

An inherent tension with the EUSS for employers is this:  from 1 July 2021, employers do not want to employ people who may not have the right to live and work in the UK, for fear of breaching immigration rules.  However, employers also must not breach the Equality Act 2010 by making someone’s continued employment dependent on their proving their EUSS status, because this could be an act of discrimination.

On this basis, the Home Office has released guidance indicating that employers who have conducted appropriate right to work checks with employees at the point of hire should not necessarily need to carry out retrospective EUSS checks after 1 July. 

New Hires After 30 June

The position with new employees is more straightforward.  You should factor checking someone’s EUSS status into your right to work checks for any new PAYE employees you hire from 1 July 2021 onwards.  If someone has not applied under the EUSS, or was not eligible to apply, they should provide their visa or proof of their indefinite leave to remain.

An employee should have applied for a share code from the Home Office, which you can use to check their status and download their file.  They should also have a letter from the Home Office indicating their EUSS status.  At the time of writing, you should be aware that these letters specify that they are not proof of an individual’s status, so from 1 July onwards you should encourage new employees to provide you with their share codes before they take up employment with you.

What About Ongoing EUSS Applications After 1 July?

The Home Office is issuing certificates of application to people who have applied under the EUSS while they wait for their applications to be processed.  The Home Office has indicated that people may be able to rely on these to secure work from 1 July until they receive their final status outcome.

What About the Self-Employed?

The Home Office guidance released so far has focused on employees.  The self-employed are responsible for demonstrating their own right to live and work in the UK.  Nevertheless, it is probably best practice to check that new subcontractors after 1 July have applied under the EUSS.

The EUSS may seem complex and difficult to navigate, but we’re here to help.  If you have any questions about the EUSS, please contact us on 020 8515 2975 or email us at info@guildhubservice.co.uk and talk to our expert team.

GuildHUB is an information resource, provided free of charge by The Guild, for accounting professionals and their clients.  If you wish to contact The Guild, please email contact@trusttheguild.com.

The content of this article is for guidance only and shall not constitute advice. Please seek independent advice or contact GuildHUB for information about its services.

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GuildHUB
06/2021
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