Tax Problem

Spectreon666

I am currently working for an english company that is totally based over in the UK. They have only just started employing a few people in Dublin. They are not however registered in ireland for tax or anything like that. They did mention to me that their tax office advised them to tell us that we will have to go into the revenue office ourselves and show our wage slips and that they will deduct our tax. I dont mind doing that really but is this actually possible?

Jo King

Spectreon666 wrote: »

I am currently working for an english company that is totally based over in the UK. They have only just started employing a few people in Dublin. They are not however registered in ireland for tax or anything like that. They did mention to me that their tax office advised them to tell us that we will have to go into the revenue office ourselves and show our wage slips and that they will deduct our tax. I dont mind doing that really but is this actually possible?

It sounds like utter nonsense. You will be liable for PRSI. The employer will have to pay their contribution. The employer must have a registration number in order for this to be done. Also if there are sales in Ireland there will have to be VAT paid. Again a registration number ( same number as the other one) will be needed. The responsibility for deducting tax will be on the employer. The tax office will not accept payments from you from each payslip. Tell your employers to get themselves an Irish based accountant and have their affairs and yours put in order from the outset.

Zynks

If they are based the UK they surely can sell to Ireland with UK registration for VAT purposes (?)
If you are working in Ireland with no company office it may be worth it checking about registering yourself as self employed, which would allow for plenty deductions on your tax bill, such as rent, utilities, car costs and so on.
In any case a chat with a tax advisor sounds like a good idea.

Publin

Zynks wrote: »

If they are based the UK they surely can sell to Ireland with UK registration for VAT purposes (?)

There's a certain annual threshold that once it's exceeded, you need to register here for VAT purposes (applies to online retailers etc.). Cant remember the figure off the top of my head, but it's relatively small circa. €35k.

Zynks wrote: »

If you are working in Ireland with no company office it may be worth it checking about registering yourself as self employed, which would allow for plenty deductions on your tax bill, such as rent, utilities, car costs and so on.
In any case a chat with a tax advisor sounds like a good idea.

Definitely, have a chat with a tax advisor. I very, very much doubt if they can employ you like that. Do you have a contract with them? How do they pay you at present - through the UK payroll (i.e. where are you getting your payslip from)? Or just cash in hand?? Do you have a contract?

If they're aftering hiring a few people in Ireland, surely they are setting up a branch/office here?

All sounds highly dodgy to me, from the details you've given it sounds to me like they'd need to register a company here, and deduct any tax/PRSI due from your payroll. If they're not paying their employers' PRSI and not deducting your taxes and paying them over, you could find yourself in a spot of bother if you are ever in the position trying of to claim social welfare in future (or even things like dental check-ups being covered under PRSI, eye tests etc.).

How Strange

You need to get some advice on this as afaik a company trading in Ireland, regardless of how many employees they have, needs to be registered in Ireland both with Companies Registration Office and the Revenue.

I think they're either very dodgy or they're talking bullsh1t or both.

What does your contract say? Are you working as an employee or a contractor?

This affects your PRSI contributions so you need to get some independent financial/legal advice on it.

Spectreon666

Publin wrote: »

Do you have a contract with them? How do they pay you at present - through the UK payroll (i.e. where are you getting your payslip from)? Or just cash in hand?? Do you have a contract?

Yes, we have a totally correct contract, we are mentioned as employees in it.
We have not received any payslips yet (after the secound month) - but received the wedge by bank transfer.

Publin wrote: »

If they're aftering hiring a few people in Ireland, surely they are setting up a branch/office here?

It seems they are not willing to open an office here. (Actually they seem also not willing to register themselves in Ireland at all) Do they want to avoid to pay PRSI? Do we have to do it instead of them??

What can we do, if we won't get a payslip soon?
Will the revenue office arbitrarily take the PAYE (!?!?!&PRSI) from our bank account?

Jo King

You should contact you local Revenue office and show your contract to them and explain what has happened. Let them contact you employer.
You should also contact the Dept of Enterprise & Employment in relation to the lack of payslips.
You do not want to find your Social Welfare benefits in a mess in a few years. You could lose out heavily if the position is not regularised.

Publin

Spectreon666 wrote: »

Yes, we have a totally correct contract, we are mentioned as employees in it.
We have not received any payslips yet (after the secound month) - but received the wedge by bank transfer.

Have they deducted any tax at all from your pay (i.e. even based on UK tax rates?,) or have they just paid your gross amount into your bank account?

Spectreon666 wrote: »

It seems they are not willing to open an office here. (Actually they seem also not willing to register themselves in Ireland at all) Do they want to avoid to pay PRSI? Do we have to do it instead of them??

Well, you have a contract to work for them as an employee, so you're certainly not self-employed as another poster suggested you may be. I'm not sure what exactly this company are up to, but IMO it sounds highly suspect. They may be avoiding PRSI, but I'd imagine they have to pay the equivalent in the UK anyway. The costs of setting up a company here are tiny, and then any payments made to you or other business expenses they incur would be deductible from their tax bill. On the PRSI issue, you're not expected to pay the employers' PRSI for them, but you will be expected to have paid your own employee PRSI contributions (including health contribution), as well as PAYE.

As far as I'm aware it is the responsibility of the company to deduct and pay these amounts over, but I'm not familiar with any cases such as this and I'm no expert in this area. Maybe you are down as an employee of the UK company, and they are deducting taxes as appropriate on that basis? Any instances I've ever come across though, even with 1 only employee, the company has registered in the country.

Spectreon666 wrote: »

What can we do, if we won't get a payslip soon? Will the revenue office arbitrarily take the PAYE (!?!?!&PRSI) from our bank account?

I'd say contact the Revenue. They won't flip out or raid your bank account! But they will likely offer you sound advice for free and make sure you are compliant. I know a lot of people have concerns about what the Revene will say, but it will be clear to them you're not evading tax or anything of the sort and they'll tell you how what payments need to be made. To be honest, you're better off letting them know and paying what's due, because if this builds up for a few months, you mightn't have budgeted for it and you could end up owing them a whole months wages + interest and penalties. You'll also find yourself losing out if you ever need to claim social welfare benefits and find that you haven't paid your contributions and aren't eligible for them.

I'd recommend being up front with the Revenue, explain the situation and they'll be helpful and get this fixed up. You've nothing to fear from the Revenue to be honest, give them a call and they'll tell you definitively what you need to do instead of some half-wit like me on an internet message board giving potentially rubbish advice .

Best of luck.

Spectreon666

I went to the revenue office during lunch yesterday and they were very helpful. Basically the said that I can become self-employed, pay tax once a year with no hassle. I relayed this to my account manager in the english company that I work for and they don't have a problem with it. As for lack of payslips, I emailed them this morning and requested that they post out my payslips for july and august so that I have them as a record for when I do go to pay my tax.

Publin

Glad to hear you got sorted. I didn't think they'd tell you to register as self-employed, goes to show what I know . I was just concerned that as there was a contract for you to work for the UK company that they'd deem you weren't self-employed, but obviously that isn't the case. That'll be helpful for you though as if you need to buy anything for business use (e.g. laptop, tools etc.), they'll be deductible in arriving at the profit for the year and hence reduce the tax you need to pay.

Spectreon666

Publin wrote: »

Glad to hear you got sorted. I didn't think they'd tell you to register as self-employed, goes to show what I know . I was just concerned that as there was a contract for you to work for the UK company that they'd deem you weren't self-employed, but obviously that isn't the case. That'll be helpful for you though as if you need to buy anything for business use (e.g. laptop, tools etc.), they'll be deductible in arriving at the profit for the year and hence reduce the tax you need to pay.

I didn't actually realise that. So if I wanted to buy something for personal use such as a laptop, can I claim that as a business item? Since it will be taken out of my income!!

Jo King

Spectreon666 wrote: »

I didn't actually realise that. So if I wanted to buy something for personal use such as a laptop, can I claim that as a business item? Since it will be taken out of my income!!

No. If you are subject to a Revenue audit, and it is found that you have claimed personal expenditure against your income, you will be charged the tax you should have paid plus interest and penalties. Clearly on some items there may be an overlap. You might use a laptop for business and also some personal use. In such a case the claim should be apportioned.
A good accountant is very useful for the self employed. A good accountant will know where the boundaries are so that you get the full benefit of any reliefs available without getting into trouble.

As a self employed person you will not be paying full PRSI, and so will have reduced Social Welfare benefits such as no entitlement to Unemployment Benefit and Disability Benefit and will not have recourse to the Unfair Dismissals legislation and other protections for employees. You should contact Scope Section of the Dept. of Social & Family Affairs to see whtether the full PRSI regime should apply to you.

jimmycrackcorm

A laptop will be no problem. No regular employees get taxed for taking their work laptops home as any personal use of such is incidental to their normal purpose. Same goes for mobile phones so get a nice expensive one.

Zynks

Spectreon666 wrote: »

I went to the revenue office during lunch yesterday and they were very helpful. Basically the said that I can become self-employed, pay tax once a year with no hassle. I relayed this to my account manager in the english company that I work for and they don't have a problem with it. As for lack of payslips, I emailed them this morning and requested that they post out my payslips for july and august so that I have them as a record for when I do go to pay my tax.

I am glad to see that the idea of self employment might work, thanks for keeping us posted.

As other posters have commented, there are downsides, but there are advantages also. You don't provide any information on the line of work, but if you are working remotely it is likely to be sales, a PC based service or something over the phone. In any case, your employer/customer will have some sort of metrics over your work (calls, revenue, deliverables,etc). If you are doing this as a self employed that is what you are selling. Other than that, it is up to you what and how you do it.

Basically you are half way between being an employee and being in business. Yes, there are disadvantages, but if you have ambition and discipline, you may find this can be a great start.

Here is a little summary:
Downside:
- Who pays for your holidays? (discuss with the company)
- Do you get paid if you get sick? (discuss with the company and/or look into insurance for income continuity (not sure of the name))
- If you become unemployed the assistance available is not the same (check to make sure you understand)
- You may find that you end up working harder than if you were employed (but you may also have more fun)

Upside:
- Genuine business related expenditures can/may be VAT free and tax deductible, including equipment, car, part of your rent/mortgage, part of electricity/heating bills, phone costs (fixed and mobile).
- You can decide how you work
- You have more freedom to look into new areas and business opportunities.

Here are a few more pointers if you need a "push" 10 Reasons You Should Never Get a Job -