Living in Ireland but paid from UK

[markn]

I am the first employee of a UK company to be based in Ireland. My employers have not set up a company in Ireland but are paying me through the UK tax system. I know that there is a taxation agreement with the UK. Do I have to set my self up as a sole trader? Do I just make a tax return and pay any outstanding tax at the end of the year? What can i do about PRSI? At present I am not paying any here.

 

[podowd]

Your UK employer doesn't necessarily need to set up an Irish company but they should register (the UK company) as an employer here in Ireland. As you are working in Ireland your employment earnings are fully taxable in Ireland, paying tax in the UK does not exempt you from paying tax here (although you would get a tax credit for any tax already deducted in UK). You will not need to register as a sole trader but you will need to submit a tax return at the year end and declare your UK earnings. The correct way to deal with this would be for your employer to register in Ireland as an employer, pay you through the Irish payroll system and account for any tax/prsi in that way.

 

[markn]

Thanks PODOWD. I requested that they register in Ireland however, they refused stating advice from a UK based tax consultant. I raised the fact that I am paying National Insurance in the UK without any benefit but would most likely get stung for PRSI here as well. The tax consultant then came back to me with a plan to get a foreign tax (zero UK rate) from the UK inland revenue, and that I would make a full declaration here. I don't have a problem with that however, the null rate has only started mid way through our tax year in May. The first few months of this year I paid tax in the UK and may have problems explaining this to the Revenue Commissioners in Ireland.

 

[GBK]

markn, you say your tax consultant came up with a plan for a zero tax rate for the UK - did this include zero NI, can you give any further deatils of tax plan - I am in a similair' ish position living in Ireland but employed by a UK company - I make a tax return and pay any additional tax to the Irish revenue ,which is fair enough, but the high rate of UK national insurance bugs me.

 

[podowd]

Markn, the plan may be best option for your employer (and you) from a UK point of view but it won't be compliant from an Irish point of view. This year's finance act introduced new measures for employees of non-irish companies and PAYE must be in operation for employees where the duties are carried out in ireland.

 

[markn]

That makes sense to me. I contacted the Revenue Commissioners here and they told me to make a return for the last tax year to include all relevant documentation.