Residency UK and Ireland for Taxation

ShowMeTheCash

Hey,

I posted a similar question a while back in another thread.

So I am from Donegal but have been working in Belfast almost 5 years now.
I own a house in Donegal but I rent in Belfast and am only home at the weekends as I have a Mon - Fri type job.

I worked PAYE up until Aug so I never really looked into taxation as it was basically all done for me.
End of August I was made redundant and I took the oppertunity to go it on my own and landed a contract mid september so everything is kind of back to how it was.

Now however I have to do my own tax returns and had to hire an accountant.
So the accountant told me you need to be careful to where you are resident and the taxation rules for PAYE and Self Employed are a little different.

Technically if I am in the state (Donegal) more that 183 days of the year then my tax liability is with Ireland though UK will take their cut first as my contract is in the UK.

Now looking at how I work I am not going to be liable for taxation in Ireland simply due to the fact that I am not going to be in the state enough days of the year.

However I do own a home in Donegal and my car is registered to that house and I am home most weekends.

Just wondering has anyone else had any dealing with the revenue around this, I just want to make sure everything is done correctly and I do not run into any hasstle further down the line.

Thanks

srsly78

If you pay the accountant he will give you a proper answer, also you will need them to help prepare returns etc.

ShowMeTheCash

srsly78 wrote: »

If you pay the accountant he will give you a proper answer, also you will need them to help prepare returns etc.

Perhaps you did not read my question?
I asked has anyone ever had dealings with the revenue around this, I have already consulted with an accountant on this.

The accountant has already provided me with the info.
183 days in 1 year and 140 per year over 2+ years.

They also stated if the revenue call me it will be up to me to prove I am resident in the UK and not the state.

But being we are share a boarder with the UK how do they prove where I am?
On the flip side how do I prove to the revenue I am resident in the UK?

The accountant said they would look at my bank statements, see where I withdraw money.
But may also look to where you register your car, own a home pay insurance etc...

So I am kind of stuck in the middle.

What I don't want is if they say, well I see you withdraw money during the week in the UK and we only see transaction in the state at the weekend but you own a house here and your car is registered here therefore we conclude you are here at least 183 days a year so we want 20,000 euro.

srsly78

It needs specialist advice because there are special rules for border workers I think - http://www.revenue.ie/en/tax/it/reliefs/trans-border-workers-relief.html

The 183 day rule may not apply here.

ShowMeTheCash

srsly78 wrote: »

It needs specialist advice because there are special rules for border workers I think - http://www.revenue.ie/en/tax/it/reliefs/trans-border-workers-relief.html

I have read everything on that site, the link does not cover what I am asking.

Also my accountant is a specialist they deal with trans-boarder workers, companies in the state and companies in the UK.

Trans-boarder-workers are people who live in the state and work in the UK. Like living in Donegal and working in Derry or are present in the state more that 183 days a year.

This comes down to residency, in order to be resident you need to be present in the state for a period of time each year.

But someone must of had to prove this at some stage, what did the revenue look at?
I think with mainland UK or any other country it might be easy, here is my passport here is my plane ticket, here is when I came back.

My accountant said "You may or may not be asked to prove this to the revenue".

She also added "It is a gray area" This idea of satisfying the revenue with no real set of guidelines is worrying.

She indicated bankstatements and even phone records to assertain your location on a day to day basis is what they tend to ask for but it all seems a bit thin!

The last thing she said is "They do not need to prove you are in the state, only that you don't have sufficient evidence to show you are in the UK".

So in short she told me to keep my bank statement and things that support that I am resident in the UK from Mon - Fri in the event I am asked by the revenue to prove it. But I don't know what the bar is here?
Me providing evidence and them saying "That's not enough" is a situation I do not want to get into.

srsly78

Sure, but why would they hassle you about it? If they applied Irish taxing rights you could just apply for relief on the UK tax paid (double taxation treaty).

Anyway I would guess your bank statement would be enough - showing activity in the UK etc.

ShowMeTheCash

srsly78 wrote: »

Sure, but why would they hassle you about it? If they applied Irish taxing rights you could just apply for relief on the UK tax paid (double taxation treaty).

Anyway I would guess your bank statement would be enough - showing activity in the UK etc.

Yeah my accountant gave me the numbers around that.
Taxation in the UK and Ireland is not a whole lot different until you start going north of around 60K a year.

The double taxation on self employed has to be comparible.
So for example I own my own business and in the UK I am allowed to pay myself a dividend from company profits and pay corporation tax only on that amount.
But Ireland does not have the same thing so any tax savings I could possibly make in the UK would simply be handed over to the state.

So if my company made 100,000 euro.
ROI would say we would take 45% of that if it was here.
UK might say we will take 30% of that

So state says well you gave 30% to the UK we will take the remaining 15%.

In this example that is 15,000 euro.

Also let's say they say we think you owe us 15K and you do not have sufficient evidence to prove otherwise we are also going to fine you for not disclosing it, that will be another 15,000 fine we now want 30,000.
The fine in Ireland for tax evasion is usually the amount owed again on top so that is a realistic number.

Arbiter of Good Taste

Credit card bills, bank statements, mileage on your car, get receipts from the toll booths, etc, etc. Anything you need to do to prove that you are one place or the other, then do it.

So for example, if you need to buy a bottle of water up north, make sure you keep the receipt, etc.

There are no hard and fast rules, so do what you can if you find you need to defend your position.

Bear in mind, you own a house and a car in Ireland, so Irish Revenue may deem you to be Irish domiciled (though non-resident). I haven't done personal tax planning for nearly 15 years, so don't know if that will be a problem for you. Though, if your advisor specialises in this area, she may already have advised on this.

srsly78

OP don't bring companies into it, that's a whole different subject. You as an individual are not the same legal entity as whatever company you own. For example your company might pay corp tax and file returns etc in the UK, but operate Irish PAYE on your salary.

ShowMeTheCash

Arbiter of Good Taste wrote: »

Credit card bills, bank statements, mileage on your car, get receipts from the toll booths, etc, etc. Anything you need to do to prove that you are one place or the other, then do it.

So for example, if you need to buy a bottle of water up north, make sure you keep the receipt, etc.

There are no hard and fast rules, so do what you can if you find you need to defend your position.

Bear in mind, you own a house and a car in Ireland, so Irish Revenue may deem you to be Irish domiciled (though non-resident). I haven't done personal tax planning for nearly 15 years, so don't know if that will be a problem for you. Though, if your advisor specialises in this area, she may already have advised on this.

Irish domiciled is not an issue according to my accountant, taxation on income can only happen if A. You work in the state B. You are resident in the state (183 days) and work elsewhere. (if a double taxation treaty exists with the country you work in this usually means you should at least not pay the same tax twice, but you do pay the difference if they are not the same i.e. Country you work in is 10% tax and ROI is 20% you will need to pay the revenue in ireland the other 10%)

Yeah I am making a point of using my debit card etc... When going for lunch or getting shopping as it will show up on the bank statement I think this is the best way opposed to holding on to ever receipt I get over a tax year.
But I will hold on to everything to defend my position if it is questioned.

The issue I will have with is, nothing will be asked of me then perhaps 5 years down the line I get a call then I need to bring evidence that I was resident in the UK 5 years pervious

@srsly78

The fact that I am a company director even if I pay myself a regualr salary I am still treated to be different than regualr PAYE so I cannot seperate the two out.
The link you sent before actually makes mention of it.


Thanks for the input guys.