Starting work in Ireland towards the end of the tax year...

redape99

Also posted in work&jobs...

Hi, I came over from England in September and set up a Ltd. Co. for IT contracting. I now want to pay myself the first salary in November and December but not sure of the best way to do it.

I have a PPS number and a Tax Allowance Cert (with 1760 personal tax credit and srcop of 34000) but the accountant who set up the company says I'm not entitled to the 1760 as I'm not resident.

I'm thinking of just paying 2 instalments and taxing both fully at 20% plus the 5% prop. director's PRSI.

Or (and I suspect the answer is no!) could I declare 2 large salary instalments of say 15K each to take more advantage of the 20% cut-off, pay the tax/prsi amounts due on those immediately and then pay myself the net salary early next year when there are more funds in the company?!


Any help most appreciated... anyone been in a similar situation?

Mr. Incognito

Tax residency is based on how many days you were in the country. Less than 183 midnights and you are not tax resident. However you may be held resident if you are in Ireland for 280 days over 2 calendar years. Presuming you were not in Ireland last year either then you would not be tax resident. A non-tax resident is not entitled to any credits whatsoever.

However, if you intend to be resident the following year you may elect to be resident under s 819(3) TCA for this year which would entitle you to avail of the credits this year.

Seperately as to the salary I'm not an accountant so I'll leave that to someone more qualified but as far as I'm aware you can't just plug salary figures like that.

redape99

Hmmm... I'm only talking about the single Personal Tax Credit of 1760, not the PAYE credit. The Citizen's Information website says that every individual is entitled to a personal tax credit and doesn't mention residency but the revenue.ie website seems to suggest it is for residents only. I phoned the PAYE helpline and explained and they said everyone is entitled to it!

Mr. Incognito

A non resident is entitled to no credits. Zero, zilch, nada. End of. No exemption for personal credits.

However, if you elect to be resident under s 819 (3) you can claim all the credits and reliefs.

Alternatively under s 1032 where an individual is a citizen of Ireland (or an E.U citizen) you can apportion the credits on the basis that your income liable to irish tax bears on your worldwide income.

In plain english that means if you have 10 K of irish salary and 90 K of "foreign" salary you are entitled to one tenth of the credits.

On a side note if your chargeable income for Irish purposes amounts to at least 75% of your total income you will be entitled to full tax credits and reliefs.

redape99

Thanks SetantaL.