UK Employer PAYE

I am employed by a company in the UK. I am resident in ROI and work from home in ROI. The UK employer does not have any connection with ROI other than I am one of its employees.

I have been employed in the above scenario since 2001. I have always been assessed for Income Tax under self assessment and pay once a year in October. My employer pays PRSI yearly via special collections.

Recently, the revenue wrote to my employer saying they had to register for Irish PAYE and deduct my Income Tax at source.

My employer doesn't want to do this for obvious reasons.

Does anyone know a solution or loophole?

My employer doesn't want to do this for obvious reasons.

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Why don't they want to do this?

We provide payroll software and have a good few UK companies (as customers) that have less than 3 employees on Irish payroll. It's easy enough to do.

[FONT=&quot]They don't want to have to register with an authority outside their jurisdiction.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Additionally they don’t want to have the overhead of administrating a separate payroll.[/FONT]

Unfortunately, they don't have a choice in the matter.

This subject is covered by the Revenue:

"Income Tax Statement of Practive SP - IT/3/07"

My employer is so insistent they even suggested I go freelance so thay can avoid the need to register for PAYE.

Hold your ground. They can't force you to be self-employed - you have rights as an employee.

I know it is difficult in this situation, but they have these obligations, and in fact the Revenue could make them backdate matters if they wanted to, to 2007 when it became obligatory.

If you are based in Ireland full time carrying out the duties of your employment then your employer must operate Irish PAYE - they have no choice. Just by reclassifying you as a contractor/self employed individual does not solve the problem - the facts would need to support that this is the case. If the tax authorities (in Ireland or the UK) look at the terms under which you provide services to the company and decide that services are provided as an employee and not a contractor (there is whole list of things they look at e.g. can you provide services to other companies, do you bear the financial risk, do you decide on how and when the work is carried out), then as well as having the continued PAYE exposure the interest/penalties will be racking up as well for your employer. The only way there would be around the PAYE requirement is if you are present in Ireland for less than 183 days in the year and none of your employment costs are borne by an Irish entity. In this case it is possible to apply for an exemption from Irish PAYE. If you are less than 60 days in Ireland in the year and no costs are borne in Ireland then there is also an exemption but there is no requirement to make an application.

To really scare your employer you may also point out that they may have an Irish corporation tax exposure due to a permanent establishment being created as a result of your presence in the country