Double taxation agreement - UK/Ire USC

JScottArd

In the case of a resident of Ireland receiving income solely from work done at source in the UK (paying UK income tax and National insurance) with regard to the Double taxation agreement, would the income/NI tax paid be considered as credit against any liability for Irish tax?

A friend of mine suggested that NI does not count against an Irish tax liability (income and USC), so just wanted to get some clarity if anyone would be so kind.

Thanks.

P.S. the "trans-boarder workers relief" does not apply in this case.

nompere

Here's part of the text of the agreement:

1. The taxes which are the subject of this Convention are:
a. in Ireland:
i. the income tax
ii. the corporation profits tax;
iii. the corporation tax; and
iv. the capital gains tax;
a. in the United Kingdom of Great Britain and Northern Ireland:
i. the income tax;
ii. the corporation tax;
iii. the petroleum revenue tax; and
iv. the capital gains tax;

USC and NI are not included in that list.

You can find the whole text here:

http://www.revenue.ie/en/practitioner/law/tax-treaties.html

JScottArd

Thanks nompere,

Just so I understand, a person resident in Ireland who is working and paying NI in the UK, would also be liable to pay full USC in Ireland. Although the UK income tax portion previously paid would count as credit against the equivalent Irish PAYE and PRSI liability?

nompere

It's complicated.

There are EU regulations on social welfare that mean a person only pays social welfare, or its equivalent, in one EU jurisdiction. You can read this: http://www.welfare.ie/en/downloads/socialsecurityrightsireland.pdf

In this country that means PRSI, not USC.

I cannot see any treaty exclusion for USC.

If/when Brexit happens it's probable that the old bilateral treaty between Ireland and the UK will be reactivated, as it is still operative for those parts of the UK that are not within the EU.

Lockedout2

Is he resident in the U.K.? could there be a case that in fact he should not be subject to U.K. Payroll taxes at all?

I'm thinking PAYE exclusion order and an Ireland PAYE number for be U.K. Employer?

JScottArd

Thanks for the replies guys, it seems to be very hard to get information on this. I'm not sure if I should be going to an accountant, solicitor or a tax specialist.

Yes resident in Ireland for the past four years, although have been working in the UK (with NI number) for a UK based company (no Irish income). The work is 3 weeks on in the UK, then 3 weeks off which is spent in Ireland. More than 183 days are spent in Ireland each year. 

I think that I am liable to pay all the USC in Ireland which would be applied to my income level, even though I have already paid full UK tax.

I think you can see why I need to get this cleared up!!    Merry Christmas lol

JScottArd

Sorry duplicate post...........

jaffusmax

JScottArd wrote: »

In the case of a resident of Ireland receiving income solely from work done at source in the UK (paying UK income tax and National insurance) with regard to the Double taxation agreement, would the income/NI tax paid be considered as credit against any liability for Irish tax?

A friend of mine suggested that NI does not count against an Irish tax liability (income and USC), so just wanted to get some clarity if anyone would be so kind.

Thanks.

P.S. the "trans-boarder workers relief" does not apply in this case.

You will need to get income tax registered in the ROI and declare foreign income each year via Form 11, a credit will then be given for UK tax paid.