Welcome to Eures Cross Border Tax Seminar Tuesday 24 th May 2016 Bishop’s Gate Hotel 8.30am – #eurestaxseminar

EURES IE/NI Cross Border Partnership Sinead McLaughlin CEO Londonderry Chamber EURES Steering Committee member & EURES #eurestaxseminar

Objectives To help citizens access employment opportunities, and to provide information on employment related issues eg social security information on both sides of the border. To help employers by providing them with access to the larger pool of labour in this cross border region. Advice is also provided to employers on a range of cross- border recruitment #eurestaxseminar

Priorities Promote the recruitment of people living in the Border region Address skills mismatches and employment bottlenecks in the region Provide information and recruitment service for employers, workers and #eurestaxseminar

Who is involved? Who are we? There are seven organisations, from both sides of the border, represented on the Partnership. These are (in alphabetical order):- Confederation of British Industry (CBI) Department for Communities (DC) Department of Social Protection (DSP) Dundalk Chamber of Commerce Irish Business and Employers’ Confederation (IBEC) Irish Congress of Trade Unions (ICTU) Londonderry Chamber of #eurestaxseminar

How can we help you? Activities New ! On line Jobs Fair for ICT & Language skills shortages – Belfast September 2 On site Job Fairs in the Border region 2 SME supports events 2 Cross Border Social Security Tax breakfasts Website being developedwww.eurescrossborder.org Information packs & FAQ booklet on Mobility in the IE/NI Border Region (available to you here today) Advisory & Recruitment #eurestaxseminar

EURES Advisers in the Partnership Lee Downey – Employer Engagement Unit, Department of Social Protection, Letterkenny – 00 (353) Stephen Hanna – Employer Engagement Unit, Department of Social Protection, Dundalk 00(353) Anne-Marie Bingham – EURES- Department for Communities – Belfast – – 00 (44) #eurestaxseminar

EURES advisers in the Partnerships Paula Kane – EURES – Department for Communities, Belfast 00(44) Sinead McLaughlin – Londonderry Chamber of Commerce – Tel – Brenda McGeeney – Dundalk Chamber of Commerce 00(353) 42 #eurestaxseminar

Thank you! This seminar has received financial support from the European Union Programme for Employment and Social Innovation "EaSI" ( ). For further information please consult: #eurestaxseminar

Taxation Implications for Cross Border Employers Rose #eurestaxseminar

1.Tax Implications for Employers employing Cross Border Workers or having staff working on either side of the border. 2. Redundancy, Pensions and Social Insurance in a cross border #eurestaxseminar

1. Employees - Working Across the Border (a)ROI Resident Employee Taking up Employment in NI UK Tax year runs from 6 April to 5 April. Personal Allowance 2015/16 £10,600 & 2016/17 £11,000 Rates on income – 20% first £31, /16 £32, /17 - lower rate – 40% £31, /16 £32, /17 up to £150,000 - higher rate – 45% over £150,000 - additional rate Rates on gross dividends – 10% in lower tax band in 2015/ % in 2016/17. – 32.5% (on gross dividend) in higher tax band for 2015/16 & 2016/17 with 10% tax credit in 2015/16. – 37.5% in additional rate band in 2015/16 with 10% tax credit for 2015/ % for 2016/17. – In 2016/17 the first £5,000 of dividends received by individual taxpayers will be taxed at 0% which ever tax band the dividends fall #eurestaxseminar

1. Employees - Working Across the Border (a)ROI Resident Employee Taking up Employment in NI NIC Rates Class 1Employees 12% - £155 - £815 per week 2% - over £815 per week Employers 13.8% - over £156 per week Employed person is generally subject to the legislation of the State in which he pursues his activity Employed person who is temporarily posted to work in NI for the same employer can continue to be subject to the social insurance legislation of the ROI provided the posting does not exceed 24 months and he is not sent to replace another #eurestaxseminar

1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment in NI Requirement to File a Tax Return – “Foreign” Income must be returned. The taxes deducted in the UK are available as a double tax credit against the ROI tax and USC on the same income. Cross Border Workers Relief (Transborder Relief) – ROI residents who commute to work in the UK. – Employment must be held for 13 weeks continuously – Tax must be paid in UK on employment income. – For every week the individual works abroad, he/she must be present in the ROI for at least one day in that week. – The relief can be claimed instead of the double taxation credit whichever is more favourable for the employee. – Separate assessment of spouses may be #eurestaxseminar

1. Employees - Working Across the Border (a)ROI Resident Employee Taking up Employment in NI Double Tax Treaty Relief for Certain Government Workers The ROI UK tax treaty Article 18 deals gives relief for certain government salaries and pensions The relief is that the income is only taxed in the state of employment and not in their home state. Eg ROI resident would not be taxed in the ROI on the employment income from government service in the UK. What is government service? Not all State funded employments are included. In order to qualify for relief the employee must be rendering services to the government or a local authority and must be discharging services of a governmental nature or employed in an educational institution. No relief – nurses, IDA etc Relief – Council #eurestaxseminar

1.Employees - Working Across the Border (b) NI Resident Employee Taking up Employment in ROI Tax year -1 January to 31 December. A tax credit system applies. Income is taxed at rates and bands then credits deducted. Joint assessment and married credit only applies to non residents where the entire income of the spouse is taxable in ROI. However aggregation can be used (TB 67) where the couple would be better off. This will however reduce the credit available against UK tax on the same #eurestaxseminar

1.Employees - Working Across the Border (b) NI Resident Employee Taking up Employment in ROI Tax Rates on income – 20% first €33,800 (Single) up to €67,600 (Married) - lower rate – Balance at 40% - marginal rate Personal Tax Credit 2016 €1,650 (Single) €3,300 (Married) Employee Tax Credit 2016 €1,650 Earned Income Tax Credit (proprietary directors) #eurestaxseminar

1.Employees - Working Across the Border (b) NI Resident Employee Taking up Employment in ROI Universal Social Charge ("USC") – 1% on the first €12,012 – 3% on next €6,656 – 5.5% on next €51,376 – 8% on the balance Capped at 3% for those aged 70 or over or those under 70 but holding a full ROI medical card with aggregate incomes of €60,000 or less No capped rates for NI #eurestaxseminar

1.Employees - Working Across the Border (b) NI Resident Employee Taking up Employment in ROI PRSI Rates Class A – Employees 4% on all earnings PRSI credit for those earning between €352 and €424 a week – max €12 a week Employers 10.75% - on total earnings where they exceed €376 per week 8.5% - on total earnings where they do not exceed €376 per #eurestaxseminar

1.Employees - Working Across the Border (b) NI Resident Employee Taking up Employment in ROI NI/UK residents required to submit an annual Self Assessment return (Form SA100) to HMRC. Tax and USC deducted in ROI are available as a double tax credit against the UK tax on the same income. No equivalent in the UK of Cross Border Workers Relief. Top up must be paid to HMRC. Double Tax Treaty Relief for Certain Government Workers Traps include terminations payments & other reliefs claimed in ROI Common mistakes – inserting tax paid in ROI as tax deducted on employment in UK – producing a refund from HMRC #eurestaxseminar

2. Employers Employing Cross Border Workers (a) ROI Employer Taking on NI Employee to work in ROI Employee needs PPS number - Proof of Identity and address will be needed. Employee must apply for tax credit certificate using Form 12A. Employer will receive notice of tax credit - P2C - in the ROS Inbox. Until tax credits certificate is received emergency basis of taxation applies. (b) NI employer taking on ROI Employee to work in NI Employee needs an NI number - arrange an evidence of identity interview. Proof of identity and address and the reason for the application will be required by the interviewer. Form P46 will need to be filed online to apply for the correct tax code for the #eurestaxseminar

3. The Tax Implications of Having Staff Working on Either Side of the Border (a) NI Employer taking on employees to carry out duties in ROI Requirement to register as an ROI employer if employees duties exceed 183 days in calendar year to 31 December. Register online on ROS or on paper Forms Prem Reg or TR1/TR2. The 60 day and 183 day Rules Not required to register if employee spends less than 60 days on duties in ROI in a calendar year Where days spent >60 <183 not required to register provided conditions #eurestaxseminar

3. The Tax Implications of Having Staff Working on Either Side of the Border (b) ROI Employer taking on employees to carry out duties in NI (or rest of UK) 183 day rule - requirement to register as a UK employer if the employee performs duties of employment in NI /UK exceeding 183 days in a tax year (ended 5 April). If from the outset it is known that the employee will exceed 183 days on duties then employer registration must commence from the outset. Register as an employer online at UK operating PAYE Real Time Information (RTI) system. Employers are required to provide online reports which will include details of the employees, the payments made to them and the deductions. This information has to be provided on or before each payday. Penalties can #eurestaxseminar

Other Issues UK Workplace Pension Automatic enrolment’ Every employer must automatically enrol workers into a workplace pension scheme if they: –are aged between 22 and State Pension age –earn more than £10,000 a year –work in the #eurestaxseminar

Workplace Pension The law says a minimum percentage of your ‘qualifying earnings’ must be paid into your workplace pension scheme. ‘Qualifying earnings’ are either: the amount you earn before tax between £5,824 and £42,385 a year your entire salary or wages before #eurestaxseminar

Workplace Pension Your employer chooses how to work out your qualifying earnings. You payYour employer paysGovt pays 0.8% 1% 0.2% rising to 4% rising to 3% rising to 1% of your ‘qualifying earnings’ by #eurestaxseminar

Pensions Cross Border – Ensure payment made to scheme in country where income is – Relief available in UK in some cases under Migrant Member, Transitional Corresponding or DTA – These reliefs are very restrictive and generally only apply where you transfer cross border with the same or an associated #eurestaxseminar

Termination Payment ROI – Tax free ex gratia limited to lower of SCSB or €200,000 – lifetime limit – Relief for foreign service – Payments for injury, disability or death not subject to 200k cap UK – First £30,000 is exempt – Statutory redundancy is included in £30,000 – Relief for foreign service in some #eurestaxseminar

Termination Payment A period of service counts as “foreign service” where the earnings from the employment are not “relevant earnings”. Relevant earnings include foreign earnings taxed in UK on a UK resident. Some or all of the period of service in the ROI will not count as foreign service – termination payment taxable in the UK. Residency planning well in advance of the termination could #eurestaxseminar

Cross Border Social Insurance Activities in One Member State Employed person subject to the legislation of the State in which he pursues his activity eg John is Resident in ROI working in NI subject to UK NIC on employment earnings. Temporary Transfer Employed person who is temporarily posted to work in another Member State for the same employer can continue to be subject to the legislation of the first State provided the posting does not exceed 24 months and he is not sent to replace another person eg John employed in ROI is posted to work in the UK for 18 months – continues to pay ROI #eurestaxseminar

Cross Border Social Insurance Activities in More than One Member State Employed person is : – subject to the legislation of the State of residence if some of his employment activity is in that State or if he pursues activities for a number of different employers in different Member States – Eg Joe lives in NI works as a salesman for an employer in ROI but covers the Border Counties of NI as well as Leinster in ROI – subject to NIC on earnings. Activities in More than One Member State Employed Person is : Subject to the legislation of the State in which the registered office of the employer is situate if he doesn’t pursue any of the employment activity in his State of residence Eg Joe gets a new role with the company and his job takes him to Germany, Poland and Holland – subject to PRSI in ROI where registered office of his employer is #eurestaxseminar

Cross Border Social Insurance Both Employed and Self Employed in Different Member States Subject to the legislation of the State of employment If employed in more than one State – subject to the legislation of the State of residence if some of his employment activity is in that State or if he pursues activities for a number of different employers in different Member States or – Subject to the legislation of the State in which the registered office of the employer is situate if he doesn’t pursue any of the employment activity in his State of residence Eg. Sean is self employed computer consultant and is based in ROI but also has parttime employment with a company in ROI and another in UK He must pay PRSI on his #eurestaxseminar

EU and Bilateral agreements allow the Social Contributions made in EU and other bilateral countries to be taken into account when assessing eligibility to Social Welfare and State #eurestaxseminar

Claiming Entitlements Jobseekers –For those on intermittent part-time hours benefits should always be claimed in the jurisdiction you last worked –For those fully unemployed benefits should be claimed in State of residence –Aggregation rules apply so NIC and pRSI can be combined to arrive at #eurestaxseminar

Claiming Entitlements Illness –Benefits should normally be claimed in jurisdiction where you last worked Maternity –Benefits should normally be claimed in jurisdiction where you last #eurestaxseminar

Claiming Entitlements Healthcare –While employed in NI the ROI resident individual (but not spouse or children) are entitled to routine NHS care –Retired individuals who were already receiving treatment for a condition can continue to do so but not for routine #eurestaxseminar

Useful Contact on Pension Entitlements Brendan Casey- PRSI Consultant #eurestaxseminar

Questions? Contact Details: Rose Tierney Tel: #eurestaxseminar

Gavin Killeen President Londonderry Chamber of #eurestaxseminar