Where am I resident?

ShowMeTheCash

So I rent a room in Belfast and work normally Mon-Fri.
I own a home in Donegal with my OH and two kids.

My usual routine is I leave Sunday night, sometimes Monday morning and am back on Friday night.

I am thinking of going self employed with contract work still in Belfast, so my routine will not really change.

Do I need to do anything with regards taxation in the state?

My understanding is you pay tax where you are resident, granted the UK will always take their cut as my contract is in the UK but as I stay in Belfast 5 days of the week do I need to even consider the irish revenue?

stevenmu

The rules on residency are listed here: http://www.revenue.ie/en/personal/circumstances/moving/tax-residence.html

It looks to me like you would not be considered tax resident. AFAIK if you are not tax resident while still maintaining an address here you are suppose to register with the revenue, but I'm not sure about that. You could always give your local revenue office a call, they're generally pretty good.

FURET

This page will be of interest, specifically:

Cross-border workers relief
This relief contained in Section 825A TCA 1997 is aimed primarily at Irish residents who commute to work in the UK. It applies where an individual commutes daily or weekly to work outside the State and pays tax on the income from the employment outside the State (but in a country with which Ireland has a tax treaty). The employment must be held for a period of 13 weeks. The individual must spend at least one day in Ireland a week. Such Irish tax residents will only pay Irish income tax on sources of income other than the foreign employment. Therefore the relief is attractive where the foreign tax is lower than the Irish tax.

In general, the Cross-Border Workers Relief will not be available in the following circumstances:

• The individual is taxable on the ‘remittance basis’.
• The individual has claimed the seafarers allowance or the split-year residence treatment.
• The income is paid by a company to a proprietary director or his/her spouse.

Mr. Incognito

Technically you are resident in both jurisdictions.

UK source employment income is subject to UK tax. But for cross border workers relief you would have to pay irish
Tax

It's linked above so no need to repeat

ShowMeTheCash

So I spoke to an accountant that is versed in UK and ROI taxation and cross boarder workers.

@ FURET

The cross boarder work relief is a little different when self-employed.
If you are PAYE then you do not pay any addition taxation in the state, it is part of the double taxation treaty.
If self-employed they will deduct the amount you pay in the UK from the amount you would be liable for in the state.

But you are only liable for taxation in the state if you meet the criteria of being resident in the state.

stevenmu posted the link.

Which is 183 days a year or 280 in a two year period.

Now technically if I was 5 days in UK and 2 days in the state every week for year.
Then I would not be liable for taxation as i would only be in the state 108 days a year.

But being in the state at all on any given day would be seen a 1 day.
So if I arrived back in Donegal at 11:59 pm on Friday night then technically Friday would be counted as 1 day...

They changed the rules on this a few years ago, it used to be if you where in the state through midnight that qualified you to be here for a day but now its if you are here at all.

Bit stupid, someone in the UK that gets his petrol in the state every day could qualify for taxation in the state if they are not careful!

But financially it makes a lot more sense to only pay tax to one country.
My accountant has warned me to be careful around this, even if I am technically not resident for tax purposes it will be on me to prove this to the Irish revenue if they decide to look at it, if I don't have reasonable evidence to support it then they could come after me for the taxable amount, the revenue do not need to provide evidence to the contrary i.e. Evidence that I was actually in the state.

It's bad enough when one country is bending you over, it is compounded when two countries are trying to do it

Mrs OBumble

Out of interest, which country pays for the schools your kids go to, or the hospital you would go to if you were sick?

ShowMeTheCash

Mrs OBumble wrote: »

Out of interest, which country pays for the schools your kids go to, or the hospital you would go to if you were sick?

I am registered with a doctor in the Derry and have private health care which I pay for me my OH and two kids.
The Irish health care system is nothing short of shocking and thats coming from a GP in the south that told me I would be better of doing so.

One of my kids is now at pre-school, it is an irish speaking school which I think is subsidised but I pay the difference. And my youngest is only 7 months old.

I do however plan to send them to the local Irish speaking schools.

Why do you ask?