Transborder relief and PRSI/USC

MatthiewEnis

Hi,

I have a question about Transborder relief and PRSI/USC.

I work in the UK and come back to ROI everyday.

Last year, an accountant filled the Form 11 for me. He put a Transborder relief for the amount of tax paid in the UK. So I did not pay tax. However he did add "PRSI-Self" at 4% meaning I had to pay 1000€ to Revenue. He did not add any mention about USC.

This year I am doing my Form 11 myself (Like a big guy ) and I'm reading online that I should not paying social security in 2 EU countries at the same time.

I'm wondering then why the accountant added "PRSI-Self" at 4% last year. Is there any chance that the "PRSI-Self" at 4% is a voluntary contribution?

On my form 11 for this year, should I claim an exemption for both USC and PRSI?

Kind Regards,
Matt.

SRASE

Transborder relief covers USC and income tax. It does not cover PRSI. As you have stated, you should not pay social insurance in more than 1 EU country at any one time. You should tick the box on the Form 11 claiming an exemption from PRSI and state reason that you are paying social insurance in the UK.

You should contact your previous accountant as to why you paid PRSI last year but it may have been an error.

DmanDmythDledge

Also because it is within the 4 year time limit you can amend the income tax return from last year.

I would look into receiving an exemption from social insurance in UK and make the voluntary payments in Ireland instead. It's good to have the security of making the payments in Ireland rather than another country just in case you ever need the benefits of paying them.

MatthiewEnis

Thank you guys.

Just wanted to let you know that I asked the accountant and his reply is below:

You are correct in saying that social security should only be paid in one state. When submitting your tax return Revenues Online service automatically applied PRSI to your cross-border income, however I see from your payslips that social security was also paid in the UK. I will need to look in to this a little more to see where you are insurable, if social security is payable in Ireland we will need to apply for a refund from HMRC, if it is payable in the UK we will need to apply for a refund the Revenue Commissioners here in Ireland. I will get back to you later today, or tomorrow at the latest re this.

Thank you both again for your help.

MatthiewEnis

Hi,

I have another question about USC.

In 2015 I had a very small salary (under the €13000 threshold) paid to me through PAYE in Ireland. However if taking into account my income from the UK, my full income was over €13000.

I know that I don't have to pay for USC on the UK income (because of the transborder relief), but what about the Irish PAYE income. The Irish PAYE income is under the threshold, but if I take the full income, then it is over the threshold

My question is, when calculating USC, should we take the full income, or only the income on which USC is due?

Regards,
Matt.

marathonic

I completely understand all of the above in relation to a PRSI exemption allowing cross border workers to escape paying PRSI - but is it something that MUST be claimed.

If I earn €25,000 on which National Insurance is paid in Northern Ireland and reside in Ireland, where I also earn €15,000 in trading income, can I leave the PRSI exemption box unticked?

I had a play around when preparing this years tax return online. The result of not ticking the box is that PRSI is calculated on all income, not just the €15,000.

However, can I opt to pay this PRSI despite paying National Insurance in Northern Ireland. This would cost me €1,600 but build a years entitlement to the state pension.

Most guidance I read states that people "don't normally pay PRSI if paying social insurance contributions in another member state" but not that they never do.

Indeed, many are paying voluntary contributions of National Insurance in the UK having left many years ago. This leads me to believe that claiming the PRSI exemption may not be mandatory.

On the flip side of the coin, surely it can't be the case that someone can earn €200,000 investment income a year in Ireland and employ themselves on minimum wage in their NI company, paying National Insurance on minimum wage and escaping PRSI on the €200,000.