Living/working in England but income from Ireland/England

My daughter lives and works in England.Is self employed and pays taxes etc . in England .On some occasions she does work for her former employer in Ireland and is paid in Euro into Irish Bank.Former employer finds this method more suitable as he has all the relevant information on his records.What she needs to know is how she treats this income so as to be Tax compliant and how she must go about it.Thanks in advance for any comments.

If she is tax resident in the UK, and the work she does for the Irish business is carried out in the UK, she should include this income in her UK accounts and pay UK tax on this income.

Thank you for reply .Just to clarify she has already got payment for this work which was payed into an Irish bank in Euro ,so is it simply a case of including this Euro payment on her UK tax return in Uk. The fact that it was payed into Irish Bank will not effect her uk tax situation in any way.There is no intention of tax avoidance just it was simpler for Irish employer to pay this way as it only happens once or twice a year.

She will need to convert the € to Sterling at the rate for the date she was paid.
She can use a daily rate or the HMRC average rate, but whatever she uses she must continually use that method.

I use www.oanda.com to get daily exchange rates.

I live in the UK. I occasionally do work for Irish clients (from my home office), and am paid in Euro into an Irish bank.

When including such earnings in my UK tax form, I use the 2nd method Domo suggested, i.e. the average yearly rate published by HMRC on their web site. A while back, when the exchange rate was steady, this was fine. Now that Sterling has fallen in value, I'm not sure if the HMRC average favours me or them - suppose it depends on which part of the year most of the income was earned!

I also complete an Irish tax return, for the rental income I earn in Ireland, and this also has to be declared in the UK tax form (the "foreign pages" section). Main problem here is that Irish and UK tax years are different. What I do, for example, is include my 2007 Irish income in my 2007/2008 UK tax return. I get my Irish tax assessment before completing my UK tax form.

James

Just a point of clarification if the earning payed in EURO have the tax deducted in Ireland does that make those earnings Tax Compliant or have they still to be submitted to the UK Revenue.

As a UK resident the income is taxable in the UK. However, a credit will be given for Irish tax paid under the Double Tax Treaty, so the income will not be doubly taxed.

rheinie,

Domo is correct. For example, I declare my Irish bank savings interest in my UK tax form (amount before tax deducted and tax deducted), and get a Foreign tax credit for same. So, I'm not doubly taxed.

But in your daughter's case, the Irish tax deducted is not from savings interest, but from earned income.

> the earning payed in EURO have the tax deducted in Ireland

Do you mean deducted at source, as in PAYE? If so, I don't understand how she can be self-employed in UK and on PAYE in Ireland.

On emigrating, her previous Irish employer would normally remove her from their PAYE payroll, and issue a P60.

Perhaps I have missunderstood something?

James