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Agreement Between the U.S. and the United Kingdom

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Agreement Between the U.S. and the United Kingdom Agreement Between The United States And The United Kingdom Contents Introduction 1 Coverage and Social Security taxes 2 Certificate of coverage 4 Monthly benefits 5 A U.K. pension may affect your U.S. benefit 8 What you need to know about Medicare 8 Claims for benefits 8 Authority to collect information for a certificate of coverage (see pages 4-5) 9 Contacting Social Security 10 Introduction benefits became effective January 1, 1988. For purposes of the agreement, references to the An agreement between the United States and United Kingdom include England; Scotland; the United Kingdom (U.K.) improves Social Wales; Northern Ireland; the Isle of Man; and Security protection for people who work or the Channel Islands of Jersey, Guernsey, have worked in both countries. It helps many Alderney, Herm and Jethow. people who, without the agreement, would not The agreement covers Social Security taxes be eligible for monthly retirement, disability or (including the U.S. Medicare portion) and Social survivors benefits under the Social Security Security retirement, disability and survivors system of one or both countries. It also helps insurance benefits. It does not cover benefits people who would otherwise have to pay under the U.S. Medicare program or the Social Security taxes to both countries on the Supplemental Security Income program. same earnings. This booklet covers highlights of the agreement The provisions of the agreement that eliminate and explains how it may help you double Social Security taxation became while you and . effective January 1, 1985. The provisions that work when you apply for benefits permit people who meet certain conditions to use their work in both countries to qualify for SocialSecurity.gov (over) Agreement Between The United States And The United Kingdom The agreement may help you, your family will be covered by the United Kingdom, and you and your employer and your employer pay Social Security taxes • While you work—If your work is covered by only to the United Kingdom. both the U.S. and the U.K. Social Security On the other hand, if your employer sends you systems, you (and your employer, if you are from one country to work for that employer or an employed) would normally have to pay Social affiliate in the other country for five years or less, Security taxes to both countries for the same you will continue to be covered by your home work. However, the agreement eliminates country and you will be exempt from coverage this double coverage so you pay taxes to in the other country. For example, if a U.S. only one system (see pages 2-5). company sends an employee to work for that • When you apply for benefits—You may employer or an affiliate in the United Kingdom have some Social Security credits in both the for no more than five years, the employer and United States and the United Kingdom but the employee will continue to pay only U.S. not have enough to be eligible for benefits Social Security taxes and will not have to pay in in one country or the other. The agreement the United Kingdom. makes it easier to qualify for benefits by If you are self-employed and reside in the United letting you add together your Social Security States or the United Kingdom, you generally will credits in both countries. For more details, be covered and taxed only by the country where see the section on “Monthly benefits” you reside. beginning on page 5. People working on the U.K. continental shelf are Coverage and Social Security taxes considered to be working in the United Kingdom. Before the agreement, employees, employers Summary of agreement rules and self-employed people could, under certain The following table shows whether your work is circumstances, be required to pay Social covered under the U.S. or U.K. Social Security Security taxes to both the United States and the system. If you are covered under U.S. Social United Kingdom for the same work. Security, you and your employer (if you are an Under the agreement, if you work as an employee) must pay U.S. Social Security taxes. employee in the United States, you normally will If you are covered under the U.K. system, you be covered by the United States, and you and and your employer (if you are an employee) your employer will pay Social Security taxes must pay U.K. Social Security taxes. The next only to the United States. If you work as an section (beginning on page 10) explains how employee in the United Kingdom, you normally to get a form from the country where you are covered that will prove you are exempt in the other country. 2 (over) Agreement Between The United States And The United Kingdom Your work status Coverage and taxes You are working in the U.K.: For a U.S. employer who: • Sent you to work in the U.K. for five years or less U.S. • Sent you to work in the U.K. for more than five years U.K. • Hired you in the U.K. U.K. For a non-U.S. employer U.K. For the U.S. government and you are a: • U.S. national U.S. (either Social Security or federal retirement program) • U.K. national U.K. You are working in the U.S.: For an employer in the U.K. who: • Sent you to work in the U.S. for five years or less U.K. • Sent you to work in the U.S. for more than five years U.S. • Hired you in the U.S. U.S. For a non-U.K. employer U.S. For the U.K. government and you are a: • U.K. national U.K. • U.S. national U.S. You are self-employed and you: • Reside in the U.S. U.S. • Reside in the U.K. U.K. If this table does not seem to describe your situation and you are: • Working in the U.S. Write to the U.S. address on page 10 for further information. • Working in the U.K. Write to the U.K. address on page 10 for further information. NOTE: As the table indicates, a U.S. worker employed in the United Kingdom can be covered by U.S. Social Security only if he or she works for a U.S. employer. A U.S. employer includes a corporation organized under the laws of the United States or any state, a partnership if at least two-thirds of the partners are U.S. residents, a person who is a resident of the U.S. or a trust if all the trustees are U.S. residents. The term also includes a foreign affiliate of a employer if the U.S. employer has entered into an agreement with the Internal Revenue Service (IRS) under section 3121(l) of the Internal Revenue Code to pay Social Security taxes for U.S. citizens and residents employed by the affiliate. 3 (over) Agreement Between The United States And The United Kingdom Certificate of coverage taxes for U.S. citizens and residents employed by the affiliate and, if yes, the effective date of A certificate of coverage issued by one country the agreement. serves as proof of exemption from Social Your employer can also request a certificate Security taxes on the same earnings in the of U.S. coverage for you over the Internet other country. using a special online request form available Certificates for employees at www.socialsecurity.gov/coc. Only an To establish an exemption from compulsory employer can use the online form to request a coverage and taxes under the U.K. system, your certificate of coverage. A self-employed person employer must request a certificate of coverage must submit a request by mail or fax. (form US/UK 1) from the U.S. at this address: To establish your exemption from coverage Social Security Administration Office of under the U.S. Social Security system, your International Programs employer in the United Kingdom must request a certificate of coverage (form UK/US 1) from the P.O. Box 17741 United Kingdom at this address: Baltimore, MD 21235-7741 Inland Revenue National Insurance USA Contributions Office Center for Non- If preferred, the request may be sent by FAX to Residents (410) 966-1861. Please note this FAX number Rooms BP 1301/BP 1302 should only be used to request certificates of coverage. Bamburgh House No special form is required to request a Benton Park View certificate but the request must be in writing and Longbenton provide the following information: Newcastle upon Tyne NE98 1ZZ • Full name of worker; ENGLAND • Date and place of birth; The same information required for a certificate • Citizenship; of coverage from the United States is needed to get a certificate from the United Kingdom • Country of worker’s permanent residence; except that you must show your U.K. National • U.S. Social Security number; Insurance number rather than your U.S. Social • Date of hire; Security number. • Country of hire; Certificates for self-employed people • Name and address of the employer in the If you are self-employed and would normally U.S. and the U.K.; and have to pay Social Security taxes to both the • Date of transfer and anticipated date U.S. and the U.K. systems, you can establish of return. your exemption from one of the taxes. In addition, your employer must indicate if • If you reside in the United States, write to the you remain an employee of the U.S.
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