Resident in the UK, working for an Irish co

James1972

Hello

need someone to point me in the right direction or some advise please.

I left Ireland to move to the UK in 2003, at the time I had no job in the UK and my company suggested that I work from home.

Things went well and still are going well, to all intents and purposes, I am still in the Dublin HQ when the phone rings at my extension it automatically transfer over here and we are both happy with the arrangement.

However I get paid in Euro, but my cost of living is in sterling which is not great at the moment - although in fairness I get by, I wasnt crying when it was nearly at parity a few years ago.

I have a mortgage over here now, got married and have an eight year old daughter. My wife works 27 1/2 hours a week

Should I be disclosing or getting my tax allowances changed for my dependant child, my marriage (UK citizen) and my mortgage?

If so, who should I be contacting and any idea what I should be telling them

I pay full rate and claim nada in Ireland

Many thanks

smeharg

James1972 wrote: »

I pay full rate and claim nada in Ireland

Many thanks

Do you mean you're paying full taxes, prsi and levies in Ireland?

It's a complex area but if you're not resident in Ireland you probably shouldn't be paying tax here.

I think you need to get proper advice.

James1972

Thanks

essentially for tax purposes I am employed in Dublin and still resident (with my fokls) in Dublin

Any recommendations as to who to get some tax advice from?

smeharg

James1972 wrote: »

Thanks

essentially for tax purposes I am employed in Dublin and still resident (with my fokls) in Dublin

Any recommendations as to who to get some tax advice from?

HMRC would probably have a different view!

I could make a recommendation-but it would be a little bit biased ;-)

Just make sure whoever you do get advice from is familiar with both UK and Irish tax.

srsly78

Pretty sure either you or your employer are gonna be in trouble with HMRC. On the bright side tax works out a bit less in the UK if you earn decent money.

Get your employer to sort it out, you are tax resident in the UK.

smeharg

srsly78 wrote: »

..

Get your employer to sort it out ...

It's unlikely the Irish employer will have any obligations in the UK unless it has a presence there.

Marcusm

smeharg wrote: »

It's unlikely the Irish employer will have any obligations in the UK unless it has a presence there.

And in certain circumstances the employee there coud constitute that presence (although not on the simple facts stated to date).

srsly78

smeharg wrote: »

It's unlikely the Irish employer will have any obligations in the UK unless it has a presence there.

Pretty sure the employer has an obligation to stop operating Irish PAYE incorrectly. The employer must either:
A) Operate UK paye
or
Let the OP invoice them (then the op handles their own uk tax)

James1972

Many thanks to all who have replied (and the Pm's) appreciated

To clarify, as far as the Irish State are aware, I live in Dublin, I have ALL my P60's from 2003 onward

I claim no relief and pay a full rate of tax in Ireland and claim for nothing - mortgage etc

I work in the shipping industry and travel back to Ireland 5 days per month to "touch base" with our HQ in Dublin, I pay the air fares etc my self.

Since 2003, my circumstances have changed, I now have a child (and another on the way) and in 2011 bought a home in the UK and in 2012 got married.

Any idea the best way forward? To clarify I am not looking to avoid tax etc, the main concern I would have would be if I was made redundant and had to fly back to Ireland every couple of weeks to collect the "dole" !

Thanks again

srsly78

Are you not paying council tax in the UK, or paying water bills? Or are all these in someone elses name? One day you will get a phone call from HMRC I reckon. They will hit you for backdated penalties and interest etc. The longer you let this go on the worse it will get.

James1972

srsly78 wrote: »

Are you not paying council tax in the UK, or paying water bills? Or are all these in someone elses name? One day you will get a phone call from HMRC I reckon. They will hit you for backdated penalties and interest etc. The longer you let this go on the worse it will get.

Paying Council Tax and as stated have a mortgage over here.

Council Tax is in mine and my wifes name and same with the mortgage

Have a UK national insurance number also

smeharg

srsly78 wrote: »

Pretty sure the employer has an obligation to stop operating Irish PAYE incorrectly. The employer must either:
A) Operate UK paye
or
Let the OP invoice them (then the op handles their own uk tax)

The Irish employer does not have an obligation to operate UK paye unless it has a presence there.

Your option B is also not correct as the Irish employer can pay an overseas employee without operating PAYE provided an exclusion order has been obtained from Revenue. The employee does not need to invoice the employer.

srsly78

How would it work then? The Irish company pays the gross salary to the employee, and then what? Then they pay their own UK tax? This pretty much sounds like a sole trader invoicing someone.

Mr. Incognito

Irish contract of employment. Irish paye and PRSI.

You will also have to file a UK tax return as the duties of your employment and being carried out in the UK with a credit in Ireland for UK taxes paid.

It is probably better to go the sole trader route and seeing as you are working from home it is more analogous to your position.

Marcusm

Mr. Incognito wrote: »

Irish contract of employment. Irish paye and PRSI.

You will also have to file a UK tax return as the duties of your employment and being carried out in the UK with a credit in Ireland for UK taxes paid.

It is probably better to go the sole trader route and seeing as you are working from home it is more analogous to your position.

Don't think I agree with this; Irish employer, non resident employee with all duties of employment exercised abroad means that the employer shoud apply for a PAYE exclusion order following which no deductions shoud be made on account of Irish tax or contributions. Fr the prior years, the employee should be seeking a refund of the deductions made on account of non residence and no Irish duties. That refund would have to come from Revenue as the employer must make te deductions in the absence of the exclusion order.

Mr. Incognito

Marcusm wrote: »

Don't think I agree with this; Irish employer, non resident employee with all duties of employment exercised abroad means that the employer shoud apply for a PAYE exclusion order following which no deductions shoud be made on account of Irish tax or contributions. Fr the prior years, the employee should be seeking a refund of the deductions made on account of non residence and no Irish duties. That refund would have to come from Revenue as the employer must make te deductions in the absence of the exclusion order.

I disagree.

He is not on secondment. He is working an Irish position from home. Home just happens to be the UK.

If he had to come into the office he would still be coming into the Irish office.

http://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CGcQFjAA&url=http%3A%2F%2Fwww.revenue.ie%2Fen%2Fabout%2Ffoi%2Fs16%2Fincome-tax-capital-gains-tax-corporation-tax%2Fpart-42%2F42-04-01.pdf%3Fdownload%3Dtrue&ei=jOwiUNvDBsiI0AXm_oCQDA&usg=AFQjCNFAxfNjiSAxP8lQ1PWZEETEdW0w4w

Marcusm

Mr. Incognito wrote: »

I disagree.

He is not on secondment. He is working an Irish position from home. Home just happens to be the UK.

If he had to come into the office he would still be coming into the Irish office.

http://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CGcQFjAA&url=http%3A%2F%2Fwww.revenue.ie%2Fen%2Fabout%2Ffoi%2Fs16%2Fincome-tax-capital-gains-tax-corporation-tax%2Fpart-42%2F42-04-01.pdf%3Fdownload%3Dtrue&ei=jOwiUNvDBsiI0AXm_oCQDA&usg=AFQjCNFAxfNjiSAxP8lQ1PWZEETEdW0w4w

The issue of a PAYE exclusion order is an administrative decision for the Revenue. The more important issue is the assessability of the remuneration. Apart from the days spent at the office in Ireland, it seems that the duties of the employment are exercised in the UK and have been for 8 years. It seems that Ireland could not assert taxing rights on the remuneration due to art 15 of the DTA between Ireland and the UK. More importantly, based on what he has stsated here, the OP is certainly resident in the UK and should have been filing UK tax returns once arrival. If he has some liability to Irish tax, that would be available for credit against his UK income tax liability. Likewise the position with respect yo PRSI/NIC needs to be regularised.

Shane732

Ahhh these threads are really starting to pi** me off!!

This is a complicated area of taxation and every time we leave a thread open it descends into someone saying no Irish tax and another person saying Irish tax on everything.

People don't appreciate that PAYE and Income Tax are two different things and then you add PRSI into the equation and it just blows peoples heads.

In principal your starting point is Irish contract = Irish PAYE & PRSI.

I principally look after the majority of the expat/assignment/secondments (or whatever you want to call them) queries in the firm. I deal with plenty of these queries with all sorts of weird and wonderful intricacies. Your hope when you get one of these is that the company haven't gone and tried to implement something themselves, otherwise the chances are its totally screwed up! They are great for generating income though - we had 7 offices working on one query...... The correspondence was gas!

Quoting sections of the DTA isn't the way to go to with these queries.

OP a couple of comments:

• Your employer is an Irish resident entity,
• You are employed under an Irish contract of employment,
• You spend less than 140 days per annum (280 days over two years) in the State,
• 100% of the duties of your employment are carried out in Ireland,
• You are currently paying Irish PAYE and Irish PRSI,
• You are not paying any UK tax on your employment income,

You might confirm if the above statements are correct. I haven't read through the whole thread so the statements above may have been covered off already and may be completely wrong.

Marcusm

Shane732 wrote: »

• 100% of the duties of your employment are carried out in Ireland,.

Sorry if you're being p*ssed off. The OP seems not to be replying but I think the bullet point above is the only one which is not correct based on the OP's statements. He has advised that he works from a home office int he UK to which his Irish office number is diverted. Additionally, he attends at an Irish office for 5 days per month. Clearly this is abopve any de minimis level but it is hard to accept the assertions made by another that the fact that he is working from a UK home is irrelevant in determining from where the employment is exercised. Followed to the logical conclusion, reductio ad absurdum, if he never attended the Irish office, could the same argument have any validity. For what it's worth, I'm unconvinced that his physical location can be disregarded in determining the extent to which the employment is exercised in the State. This is not the situation of an NI based employee crossing the border each day.



Frankly, I feel a little sorry for the OP as some small planning by his employer at the beginning could have made things much simpler for him. He may be required to be subject to PAYE but it is hard to accept that he has a liability for Irish income tax on 100% of his employment income as it is not "exercised" in the State. I do not think that his employer would have to have a PE in the UK for the employee to be exercising his employment outside Ireland, for example.


As much as the OP needs Irish tax advice, he also needs UK tax advice. Whether that is at his expense or that of his employer will be known only to them.

Shane732

Marcusm wrote: »

[/LIST]
Sorry if you're being p*ssed off. The OP seems not to be replying but I think the bullet point above is the only one which is not correct based on the OP's statements. He has advised that he works from a home office int he UK to which his Irish office number is diverted. Additionally, he attends at an Irish office for 5 days per month. Clearly this is abopve any de minimis level but it is hard to accept the assertions made by another that the fact that he is working from a UK home is irrelevant in determining from where the employment is exercised. Followed to the logical conclusion, reductio ad absurdum, if he never attended the Irish office, could the same argument have any validity. For what it's worth, I'm unconvinced that his physical location can be disregarded in determining the extent to which the employment is exercised in the State. This is not the situation of an NI based employee crossing the border each day.



Frankly, I feel a little sorry for the OP as some small planning by his employer at the beginning could have made things much simpler for him. He may be required to be subject to PAYE but it is hard to accept that he has a liability for Irish income tax on 100% of his employment income as it is not "exercised" in the State. I do not think that his employer would have to have a PE in the UK for the employee to be exercising his employment outside Ireland, for example.


As much as the OP needs Irish tax advice, he also needs UK tax advice. Whether that is at his expense or that of his employer will be known only to them.

Ok, based on your comments I suspect the appropriate treatment at present should be:

• Irish PAYE on 100% of employment income,
• UK PAYE on 100% of employment income,
• NIC on 100% of employment income,
• PRSI on 100% of employment income

There's any number of issues with the above, however based on a strict reading of the legislation in both countries that's what be happening.

The best outcome in this would be:

• UK PAYE on portion of duties carried out in the UK,
• NIC through payroll on duties of employment carried out in the UK,
• Irish PAYE on portion of duties carried out in Ireland,
• Potentially NIC through UK Income Tax return on duties of employment carried out in the Ireland.
• No Irish PRSI

The individual would have to file a UK income tax return, return details of Irish employment income and claim a tax credit for Irish PAYE deducted.

It's an absolute mess to clear up though, not to mention costly!