Contracting in UK - Dividends Tax

[Dell123]

Hi

I have immigrated to London and have been offered a contract IT position for 6 months and afterwards to go on to the company payroll. The agency and company want me to go down the route of a limited company. I have no problem doing this in general but wanted to clarify Irish tax on UK dividends.

I will be taking my salary in the form of a dividend from the UK limited company for which I will pay tax in the UK. Will I then pay tax in Ireland also or does double taxation/non residence remove the need?

I have reviewed many sites and revenue.ie but just want anyone who has experience to clarify.

I will engage an accountant but if someone had any information in the meantime, perhaps I can rule out the Ltd route and save the costs of accountant for other expenses.

I have just moved but will most likely be here 2 yrs.

Thanks

 

[Setanta12]

Which company's payroll? The IT company or the recruiter's payroll ?

I'm wondering why they're siuggesting two options, first A than B, and not presenting a choice of A or B (as other UK recruiters do).

how long are you emigrating for ? If for good, then likely you will lose Irish residency and (I stand to be corrected here) can apply to lose it immediately. This may be of benefit to you as if you are going fdown the road of a UK company (you being the sole director/employee/shareholder) there is a UK tax saving if you get paid by dividends from your own company (n/a if you're employed by the recruiter); added to which there is a nice VAT saving available to you operating through your oown company (equivalent doesn't exist in Ireland). This saving (/extra income) is not available if employed through the recruiter.

MOst recruiters in the UK have tied themselves in with accountancy firms specialising in these small one-man-band companies so while it may appear they cost an arm and a leg, they are worth it (if you can't provide your set of accounts/UK VAT return etc)

 

[Dell123]

Hi Kildavin

Thank you for the reply. It's been pretty much presented by recruiter that I would have to go down either Ltd company or under an umbrella company with an accountant they have recommended. I don't wish to rock the boat and say I would prefer to be employed directly by the IT company.

I can't say for definate I will be here for the 3 years necessary to relinquish my "ordinarily resident" status in Ireland. The plan at the moment is 2 years. I am happy to go with the LTD option so long as there won't be a large additional tax obligation in Ireland when I go to take out my salary in the form of dividends?

I'll look into the relinquishing my irish residency option.

Thanks again