Professional Service Required - Review UK Tax Due on Irish Income

rampantbunny

Hi all. Looking for a professional service here if possible. If anyone can help, send me a PM.

Details...
I took a job in Ireland in June 2012, but didn't physically relocate from the UK until Oct 2013 (was working in UK for approx. 7 years).
In Oct 2013 I employed a UK accountant to file my UK Self Assessment.
Since I was paying tax to Irish Revenue since assuming Irish employment, I figured there wouldn't necessarily be too much tax due to HMRC, if any.

My UK tax bill comes in at £4660, due on 31-Jan-2014.
I'm surprised at this figure so would like someone to take a look at my tax computation for a second opinion.

Cheers.

Couple of things to establish first:

1. Ireland and UK have a double tax treaty so you won't be taxed twice on the same income.

2. Assuming you are a PAYE employee, the tax you pay is ultimately determined by where is your employment exercised. If as a PAYE employee, your employment was exercised in the UK then you were taxable in the UK.

3. If you are on PAYE, why did you register for Self Assessment in the UK?

4. Is the UK Accountant giving you a credit for the Irish tax paid?

Based on the info you provided, it appears that you should not have been on Irish PAYE and your employer should have operated a UK Payroll.

rampantbunny

brenbrady wrote: »

Couple of things to establish first:

1. Ireland and UK have a double tax treaty so you won't be taxed twice on the same income.

2. Assuming you are a PAYE employee, the tax you pay is ultimately determined by where is your employment exercised. If as a PAYE employee, your employment was exercised in the UK then you were taxable in the UK.

3. If you are on PAYE, why did you register for Self Assessment in the UK?

4. Is the UK Accountant giving you a credit for the Irish tax paid?

Based on the info you provided, it appears that you should not have been on Irish PAYE and your employer should have operated a UK Payroll.

1. Thanks. This is what I understood to be the case.

From my limited understanding (and I could be way off on my appreciation of the figures); it looks like my Irish income €X, if taxed at UK rates would incur a tax obligation to HMRC of €Y.

Factoring in the 'dual taxation' piece - the tax I paid in Ireland was deducted from this figure. This now leaves the amount of tax outstanding, due to the UK.
Assuming the above is correct, unless the tax rates between Ireland and the UK are considerably different I would have expected tax due to HMRC to be minimal if any.

But in Nov 2012, full Irish tax credits were applied. This would result in only a small amount of tax being paid on earnings of €X during the UK tax year. In Ireland I assume it would all balance out over the rest of the year. But in the UK tax year it looks like a shortfall in tax...therefore money owed somewhere to someone i.e. HMRC.


2. "Employment exercised in Ireland" - if by this you mean where was the physical work based, then yes, employment was exercised in Ireland. While resident in the UK I was taxed at source (believe this means taxed on Irish income in Ireland therefore money due to Irish Rev. not HMRC)

3. I did not explicitly register for Self Assessment in UK. In the UK tax year 2012-2013 (and previous) I was a director of a UK Ltd company. As a director, every year I'm prompted to file a self-assessment. I had minimal income from this directorship but tax was paid in the UK as well as the usual tax on savings interest etc.

4. Yes, they applied tax credits, but I'd like to understand how much has been applied.

Ultimately, what I don't understand is, if paying the correct tax in Ireland, having tax credits applied, why then is it deemed that there is a shortfall in the tax due. And therefore a sizable UK tax bill.

Appreciate the help. Again, professional service required I think.

Alan Shore

You need to establish the tax credits and standard rate cut off applied between Jun and Dec 12. If you received the cumulative benefit of these then there was an assumption that you had no income jan - May 12 which is not the case and therefore results in a liability.

rampantbunny

Alan Shore wrote: »

You need to establish the tax credits and standard rate cut off applied between Jun and Dec 12. If you received the cumulative benefit of these then there was an assumption that you had no income jan - May 12 which is not the case and therefore results in a liability.

Thanks Alan.

What I really need is for someone to take my documentation and review the calculations.

Any recommendations?

Mr. Incognito

Dear God.

Read the forum rules.

This is NOT the Yellow pages.

Firstly, Irish contract of employment. Irish source taxed income. If you are resident/ performing work whilst physically located in the UK you may have a UK tax exposure also. You have UK Directorships which would trigger a UK filing in any event.

You have engaged a UK Accountant. If you are on Irish Payroll he should have done an effective rate calculation and given you a credit for foreign tax paid.

Any competant accountant would be able to do this for both jurisdictions.

OP Banned for looking for specific professional advice. Apologies but we cannot have this clutter around here. You paid an accountant- take it up with him.

Respondents banned for 24 hours for giving said advice.

Thread closed.