1. Taxation Implications for Cross Border Employers & Workers
Rose Tierney
June 2018

2. EURES
The EURES (which stands for European Employment Services – most people don’t know this!) Cross Border Partnership is there to support the cross border worker, jobseeker and employer.
EURES Advisers are based all along the border region, north and south, in the government employment services as well as through chambers of commerce and trade union bodies.
Please log on to our website for all the latest information on cross border working, job seeking or employing and the important issues of the day or follow us on
Any queries after the event please contact the EURES Cross Border Partnership and an adviser will follow up with presently.

3. 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 context. 3. Brexit – what happens next?

4. 1. Employees - Working Across the Border
ROI Resident Employee Taking up Employment in NI
UK Tax year runs from 6 April to 5 April.
Personal Allowance 2018/19 £11,850 (2017/18 £11,500)
Personal Allowance restricted where income >£100,000
£1 restriction for every £2 of income
 Rates on income
20% first £34, /19 (2017/18 £33,500) - basic rate
40% £34,501 up to £150,000 - higher rate
45% over £150,000 - additional rate
 Rates on gross dividends
First £2,000 in basic rate bands 0%
Remainder of basic rate band 7.5%
32.5% in higher tax band
38.1% in additional rate band.

5. 1. Employees - Working Across the Border
ROI Resident Employee Taking up Employment in NI
NIC Rates 
Class 1 Employees
12% - £162 - £892 per week
2% - over £892 per week
Employers
13.8% - over £162 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 person

6. 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 treatment of spouses may be preferable.

7. 1. Employees - Working Across the Border
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 service salaries and pensions
The relief is that the income is only taxed in the state of employment and not in their home state.
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 workers
Inconsistent answers from HMRC & Revenue – case by case basis

8. 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 income.

9. 1.Employees - Working Across the Border
(b) NI Resident Employee Taking up Employment in ROI
Tax Rates on income
20% first €34,550 (Single) up to €69,100 (Married) - lower rate
Balance at 40% - marginal rate
Personal Tax Credit €1,650 (Single) €3,300 (Married)
Employee Tax Credit 2018 €1,650
Earned Income Tax Credit (self employed & proprietary directors & their spouses) €1,150

10. 1.Employees - Working Across the Border
(b) NI Resident Employee Taking up Employment in ROI
Universal Social Charge ("USC")
0.5% on the first €12,012
2% on next €7,360
4.75% on next €50,672
8% on the balance
 Capped at 2.5% 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 residents 

11. 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
10.85% - on total earnings where they exceed €376 per week
8.6% - on total earnings where they do not exceed €376 per week 

12. 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
- a lot of anomalies – “services of a governmental nature”
- anecdotally inconsistent decisions by Revenue & HMRC

13. 1.Employees - Working Across the Border
(b) NI Resident Employee Taking up Employment in ROI
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 !!

14. 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 credits by registering for My Account online.
Employer will receive notice of tax credit - P2C - in the ROS Inbox. Until tax credits certificate is received emergency basis of taxation applies.

15. 2. Employers Employing Cross Border Workers
(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. Letter from Employer may be needed.
Form P46 will need to be filed online to apply for the correct tax code for the employee.

16. 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
 Mistaken assumption often made that they can work in ROI for 183 days before employer has to register. WRONG!
They have 30 day, 60 days and 183 day rules
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 30, 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 and conditions satisfied
Where days spent >60 <183 required to register but not deduct taxes provided conditions satisfied

17. ROI Requirements No PAYE/No Reporting Clearance from PAYE obligations
Under 30 Irish workdays p.a.
Up to 60 Irish workdays p.a.
Between 60 Irish workdays Irish days p.a. [3]
Not Irish resident
Not Irish resident Tax treaty resident outside Ireland
No application to Revenue
Application required to Revenue Subject to PAYE in home location
Relief under domestic tax
Meets tax treaty exemption rules

18. 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
Treaty Conditions
> 30 days and ≤ 60 days
No Requirement to operate Irish PAYE where: > 30 days and ≤ 60 days
1)       Employee resident in Double Taxation Agreement (DTA) State and not resident in Ireland;
2)       Genuine “foreign employment”;
3)       Individual not paid by an Irish Permanent Establishment (PE);
4)       Duties performed in Ireland ≤ 60 days.

19. 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
Treaty Conditions
> 60 days and ≤183 days
Where the employee is in Ireland ≤ 183 days and PAYE is operated in the “home” State from 1 January 2007 there is no requirement to operate PAYE in Ireland provided the conditions at 1) – 3) above are met AND provided the foreign employer:
Ø       is registered in Ireland as an employer for PAYE; AND
Ø       maintains a record of the full name, latest Irish and overseas address, date of commencement and cessation of individual, location where individual carries out duties of temporary assignment and amount of earnings in relation to temporary assignment; AND
Ø       on request, supplies a copy of the contract relating to the employer’s engagement in Ireland; AND

20. 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
Treaty Conditions continued
Ø       signs a written acknowledgement that in all cases where a liability is subsequently found to arise that they will pay any Irish PAYE that should have been paid; AND
Ø       supplies evidence (e.g. payslip/ statement from HM Revenue & Customs) of PAYE being operated in the UK on the duties performed in Ireland; AND
Ø       seeks clearance from Irish Revenue Commissioners by 21 days after the date the assignee takes up the duties in Ireland.
On receipt of written confirmation from the Revenue Commissioners, Irish PAYE need not be operated.

21. 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
If the above conditions are not met, the employer should apply Irish PAYE by reference to the duties performed in Ireland, but should review the position after the end of the tax year to see if a refund is available under the relevant DTA
> 183 days
Apply Irish PAYE by reference to duties performed in Ireland. The balance of employment income may be taxable in Ireland (Schedule D, Case III) if the individual is Irish tax resident.

22. 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).
UK also have a 30 days and 60 days rule.
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

23. Mistaken assumptions?
Employee or Employer can decide where payroll is operated- Wrong
Always based on where the duties are carried out.
Employee or Employer can “elect to be taxed in home country” Wrong
No ability for employee or employer to “elect” to be taxed in home country.
Based on domicile or residence of the employee. Wrong – residence of employee is only relevant for the treaty exemption

24. Remote Workers
Eg Employer in Derry/L’Derry Employee resident in Donegal works from home.
No treaty exemption because of residence
Must set up ROI payroll

25. Other Issues Real Time Reporting
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 apply.

26. Other Issues Real Time Reporting
Irish Revenue introducing SMART PAYE from 1 Jan 2019
Real Time Reporting
Apply to Revenue for RPN 2 days before each paydate.

27. Other Issues Real Time Reporting
Work is ongoing and software providers will have to update software in compliance with the new system

28. Workplace Pension 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 UK

29. 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 £5,876 and £45,000 a year
your entire salary or wages before tax

30. Workplace Pension
Your employer chooses how to work out your qualifying earnings.
You pay Your employer pays Govt pays
1% 1% % (tax relief)
rising to 5% rising to 3% rising to 1%
of your ‘qualifying earnings’ by 2019

31. Workplace Pension in ROI?
There has been an announcement by Leo Varadkar that he intends this to be in place by 2021.

32. 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 employer.

33. 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
Pension lump sums paid in the UK to ROI residents – excess over tax free lump sum – taxed as Sch D Case IV and doesn’t qualify for remittance basis of taxation for non domiciled persons.

34. Termination Payment UK First £30,000 is exempt
Statutory redundancy is included in £30,000
Relief for foreign service in some cases

35. 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 help

36. Claiming Entitlements
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 Pension.

37. Claiming Entitlements
Jobseekers
For those on intermittent parttime 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 entitlements

38. Claiming Entitlements
Illness
Benefits should normally be claimed in jurisdiction where you last worked
Maternity

39. 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 services

40. State Pension Take control of your State pension.
Know what your contribution record says
Request UK record
Online through GOVT Gateway or
By post
National Insurance Contributions and Employer Office HM Revenue and Customs BX9 1AN United Kingdom or
By Phone:

41. State Pension Request ROI record
By post
PRSI Records
Department of Social Protection McCarter's Road Ardaravan Buncrana Donegal Ireland Tel:(01)

42. 3. Brexit What Happens Next?
The 4 Freedoms
free movement of goods, capital, services, and labour
Goods – customs tariff barriers – WTO or some agreed arrangement?
Capital – Foreign Exchange Controls??
Services – Increased in country regulation?
Labour – freedom of movement?

43. 3. Brexit What Happens Next?
Free movement of labour
Common Travel Area since 1920’s
No visa or passport requirements although ID required
Expected that this will continue but no guarantees
Other practicalities of cross border workers
Currency movements on wages
Difficulty getting mortgages when earning in foreign currency
Reciprocal access to social welfare & state pensions

44. 3. Brexit What Happens Next?
The saving grace is the existence of the tax treaty between ROI and UK. This eliminates double taxation or allocates taxing rights to types of income.
The treaty will apply irrespective of Brexit.

45. Questions? Contact Details: Rose Tierney Tel: +353 47 57843