As an employee you must pay taxes where you earn your income – This will be in Northern Ireland. The tax due will be deducted through your employer’s PAYE scheme.
There is a Double Taxation Agreement in place between Northern Ireland and Ireland, this Double Taxation Agreement means you will be credited for any tax paid in Northern Ireland.
You may also be required to register for self – assessment and to submit an annual self -assessment tax return to Revenue Commissioners in Ireland. This should declare your worldwide income.
The Irish tax year ends 31 December with the self-assessment return and tax due to be paid by 31 October.
A cross border worker who is resident in Ireland and commutes daily/weekly to their place of work in Northern Ireland and who pays tax on the income from that employment can also avail of Trans-border Worker relief. This relief will ensure you will not pay additional tax in Ireland unless you have additional income from other sources. Please note, a proprietary director cannot claim Trans-border relief from a connected business.
Also, note USC does not apply to Northern Ireland employment income which qualifies for Trans-border Workers Relief.
Conditions to Qualify for Transborder Workers Relief:
- Employment must be exercised wholly in a country with which Ireland has a Double Taxation Agreement
- Employment must be held for a continuous period of at least 13 weeks in the tax year. Income from this employment must be subject to tax in the other country and this tax must actually have been paid to the relevant authorities and not be eligible for a refund
- For every week the individual works abroad, he/she must be present in the State for at least one day in that week.
Relief Due: Individuals tax liability is reduced to a "specified amount" The "Specified Amount" is calculated as follows:
Total Irish Tax Liability x (Income other than Foreign Employment Income / Total Income)
As an employee, you must pay taxes where you earn your income – this will be in Ireland. The tax due will be deducted through your employer’s PAYE scheme.
As a resident in Northern Ireland you will be required to register for self – assessment and to submit an annual self - assessment tax return to HM Revenue & Customs. This should declare your worldwide income.
There is a Double Taxation Agreement in place between Northern Ireland and Ireland, this Double Taxation Agreement means you will be credited for any tax and universal social charge paid in Ireland. Once your income has been calculated under UK rules (via self-assessment), any balance of tax due after relief for Irish taxes deducted will be payable in the UK.
There is also an exemption for income from government employment which applies if a national of one state lives in the other state but carries out duties of a government nature in the other state.
Please note, you cannot claim relief for any PRSI paid, and you will not pay UK National Insurance on the same income.
The UK tax year ends on 5th April with the self-assessment return and tax due by 31st January following the year end.
If your employees will perform all of their duties of employment in Northern Ireland or their duties will be in excess of 183 days during the tax year to 5 April then you must register as an employer in the UK from Day 1, this can be completed on-line at www.gov.uk/registeremployer. Not only will you need to operate a payroll scheme but you must also report your payroll in real-time (R.T.I.) to HM Revenue & Customs each and every time you pay your employees in order to avoid penalties.
For employees who do not spend more than 183 days in the UK the following should be noted.
Employees resident in a Double Taxation Agreement country who remain on the Irish payroll may be treated as employed by the Irish employer where they are present in the UK for a period of less than 60 days and that period does not form part of a more substantial period of presence in the UK. In such cases, therefore, treaty relief may apply if the other conditions for it are met. The rule also applies where the employee’s remuneration costs are borne by a UK branch or permanent establishment of a foreign employer. The rule does not apply where the employee’s presence in the tax year is for less than 60 days but it is part of an actual or anticipated longer period of 60 days or more, which need not be continuous and must take into account past visits and expected future return visits to the UK.
Under Short Term Business Visitor Arrangements, PAYE can be relaxed if the main conditions under EP Appendix 4 are applied and the Visits to the UK are recorded as follows:
- 1-59 Days – No requirement for employer or employee
- 60-90 days – PAYE can be disregarded provided the employer supplies specific information to HMRC by 31 May following the end of the tax year
- 91-150 days – Conditions as per 60-90 days to be applied together with statement from overseas Revenue for specific employees
- 151 – 183 days – Conditions as per 60-90 days and 91-150 days to be applied. In addition to this further information must be supplied to HMRC re individual employees.
If your employees will perform all of their duties of employment in Ireland or their duties will be in excess of 183 days during the tax year to 31 December then you must register as an employer for Irish PAYE, this can be done by completing Form TR1(FT) for individuals or TR2(FT) for companies and submitting to the Revenue Commissioners. Employees will be subject to Irish PAYE, PRSI, USC and LPT (if applicable).
Each month you will need to complete and submit Form P30 to Revenue Commissioners detailing the total PAYE/PRSI/USC/LPT due for the previous month. Returns must be submitted (online) by the 14th following the month end and PAYE liability must be paid (online) by the 23rd following the month end.
Penalty and interest charges will be incurred for late submission of P30 returns and late payments.
The requirements for you operating an Irish payroll depend on the number of days the employees will spend in Ireland carrying out the duties of employment.
It is important that you look at the number of days that your employees are expected to spend in Ireland for a complete tax year in order to determine where they should be taxed. Details of days worked in Ireland and the associated reporting requirements are provided below:
- 1-30 days - no Ireland payroll required
- 30-60 days -no Ireland payroll required
- 60-183 days - must seek clearance from Revenue Commissioner in Ireland within 21 days of commencing duties in Ireland not to operate Ireland payroll. There are however conditions which must be met and these must be satisfied before clearance can be sought. An application form is required and should be submitted to the Revenue Commissioners within the 21 day period.
- More than 183 days then you must operate a Ireland payroll from day one.
If your Northern Ireland employees are required to be taxed on both the Northern Ireland and Ireland PAYE systems then you can obtain immediate relief by applying to HMRC for a Net of Foreign tax credit relief scheme (Appendix 5 Employer). This will allow you to deduct Ireland tax in the same pay period and give relief for the tax deducted in the UK via the Northern Ireland payroll and only pay the net tax due to HMRC.
If your employees are Ireland residents then you are required to operate an Irish payroll.
If your employees are Northern Ireland residents and working for Ireland business and carrying out their duties of employment in Ireland then Irish payroll should apply from day one.
If Northern Ireland employees will spend their time both in Northern Ireland and Ireland please refer to no. of days rule as shown in Q.4 to determine taxation in the Republic of Ireland.
If your Northern Ireland employees are on a temporary secondment (less than 24 months) to Ireland they can choose to continue to pay UK national insurance by obtaining an A1 Certificate.
To register as an employer in Ireland go to www.revenue.ie to register online or by completing a TR1 form for sole trader/partnership or TR2 form for a company. These forms are available for download at www.revenue.ie
Please note you are required to file monthly P30 Returns by 14th following the month end and pay on-line your PAYE liability which is debited by the 23rd following the month end.
Finally, you must follow Ireland rules in relation to employment law.
You will be required to operate a Northern Ireland payroll for all staff employed by the Northern Ireland business regardless of whether they are Northern Ireland or Ireland resident employees. All taxes are deductible in Northern Ireland and payable to HMRC.
If your employees are Ireland residents and working for the Northern Ireland business then they should be taxed in the UK. If they are on a temporary secondment (less than 24 months) they can choose to continue to pay PRSI in Ireland by obtaining an A1 certificate.
If your Irish resident employees are employed by the Irish business and work between 60-183 days in Northern Ireland then UK payroll will not apply and can be paid through Ireland payroll (please refer to Q. 3 to determine taxation in the UK). If however you envisage that your Ireland employees will spend more than 183days in the Northern Ireland business, then Northern Ireland PAYE should apply from Day1.
Note that you must follow Northern Ireland rules in relation to employment law for those employed by the Northern Ireland business.
Through your employment in Ireland you must pay Health Contributions known as PRSI (Pay Related Social Insurance) unless your income is at a sufficiently low level that you would be able to qualify for a medical Card in Ireland and be exempt from the Health Contribution as the e holder of the Medical Card.
You and your husband are entitled to receive medical and maternity care in both Northern Ireland and Ireland (residency alone will entitle you to NHS medical care). You should both have a medical card issued by Central Services Agency Belfast which you can use to register with a doctor in Northern Ireland to enable you to receive medical and maternity care when needed.
If relevant, maternity pay should be claimed through Social Welfare in Ireland. Child Benefit should be claimed in Ireland. Claims can also be made if appropriate for Family Income Support, and Working Tax Credit in Northern Ireland.
Where both spouses work on either side of the border, entitlement to claiming Child Benefit will fall to the residence of the children. You are therefore entitled to claim Child Benefit in Northern Ireland. However, as your husband works in Ireland, you can claim the Family Benefit Supplement in Ireland. The supplement is calculated based on the difference between the Northern Ireland child benefit & child tax credit and Ireland child benefit. Any shortfall if any, will be paid as a supplement to you by Social Welfare in Ireland.
Working Tax Credit and Child Tax Credit can also be claimed in Northern Ireland.
Where both spouses work on either side of the border, entitlement to claiming Child Benefit will fall to the residence of the children. You are therefore entitled to claim Child Benefit in the Republic of Ireland.
However as your husband works in Northern Ireland, you can claim a top-up Supplement in Northern Ireland. The supplement is calculated based on the difference between the Irish child benefit and the Northern Ireland child benefit + child tax credit. Any shortfall if any, will be paid as a supplement to you by Social Security in Northern Ireland.
Working Tax Credit and Child Tax Credit can also be claimed in Northern Ireland due to your husband’s employment there.
You are entitled to free GP treatment as a cross border worker however dental treatment is subsidised and is not generally free. Your family is not entitled to these rights. As a cross border worker resident in Ireland you are entitled to an Irish medical card from the Health Service Executive in Ireland. This will entitle you to free public healthcare in Ireland. This may also apply to your spouse and any children, provided you both have no other income in Ireland (i.e. your employment income is your family’s only source of income), do not pay PRSI and do not claim any social welfare benefits.
Under EU Regulations the country you last paid social insurance to will usually consider your entitlement to sickness benefit. Previous Social Insurance paid in European Countries can be combined with PRSI or National Insurance Contributions to help you qualify for social welfare benefits. However if you have not paid sufficient National Insurance contributions or PRSI you may not be entitled to any illness benefit in any state. In this instance you may be entitled to means tested social security benefit depending on your household income.
If you are a resident of Ireland you will be required to register for self - assessment and submit an annual self - assessment tax return to the Revenue Commissioners in Ireland to disclose your worldwide income. If your only income is your state pension from Northern Ireland there should be no tax due to the Revenue Commissioners in Ireland. If you do have other income along with your UK state pension, you may be subject to tax in Ireland however double taxation relief will be given for any UK tax suffered on your other Northern Ireland income.
If you have a Northern Ireland private pension you may be able to receive this gross. In order to clarify if your change in residency would have any impact on your pension please seek professional advice in advance from your pension provider who will provide guidance on your individual circumstances.
If you are a resident of Northern Ireland you will be required to register for self - assessment and submit an annual self - assessment tax return to HMRC to disclose your worldwide income. Your Irish state and other pension income will be subject to tax in Northern Ireland however double taxation relief will be given for any Irish tax suffered on your Irish pension income.
If you have an Irish private pension you may be able to receive this gross. In order to clarify if your change in residency would have any impact on your pension please seek professional advice in advance from your pension provider who will provide guidance on your individual circumstances.
If you work in Ireland your PRSI and National Insurance payments you may have paid in Northern Ireland from previous employments can be combined to help you qualify for a Northern Ireland State Pension.
You could potentially be entitled to a pension from both Northern Ireland and Ireland depending on the length of time you are employed in Ireland. EU directives state that cross border workers who have paid social insurance contributions in two or more member states may be entitled to a pension or partial pension from each country awarded on a pro rata basis. When you reach State Pension age this will be decided taking into account your country of residence.
Your payment will be taxed under Northern Ireland rules. The 1st £30,000 of your statutory redundancy payment is tax free and the balance becomes taxable. Under Ireland rules the tax free element of your redundancy payment is the lower of your standard capital superannuation benefit (SCSB- calculation based on length of service and average pay in previous three years) or €200,000 lifetime limit. However there may be relief for any period of service in Northern Ireland.
In relation to any benefits you are entitled too, under EU social security rules you would make any claim for benefits in your country of residence. You should therefore make a claim for jobseekers benefit in your local welfare office in Ireland. You must have paid sufficient social insurance contributions in order to quality. This can be national insurance, PRSI or a combination of both. If you do not qualify for jobseekers benefit you may qualify for a means tested jobseekers allowance from social welfare in Ireland.
It should also be noted that as a resident of Ireland claiming Jobseekers benefit you CAN take up part-time work in Northern Ireland and still receive reduced Jobseekers Benefit from Ireland.
Your redundancy payment will be calculated and taxed under Irish rules based on SCSBcalculation which is based on length of service and average pay in previous three years or €200,000 lifetime limit. However as you are Northern Ireland resident it will also be taxed in the Northern Ireland with double taxation relief given in respect of any Irish tax paid.
Under Northern Ireland rules only the first £30,000 of your statutory redundancy payment would be tax free with the remainder being taxable. However if you were entitled to claim a foreign earning exemption for any period during your Irish employment, you may be able to claim this as well as the statutory exemption.
In relation to any benefits you are entitled too, under EU social security rules you would make any claim for benefits in your country of residence. You should therefore make a claim for jobseekers allowance by contacting your local Jobs & Benefits or Social Security Office in Northern Ireland.
Your Northern Ireland employment income will be chargeable to tax at source in the UK. For any tax year that you are resident in the Republic of Ireland you will be liable to Irish income tax on your total income from all sources including any income from a foreign employment. You will also be entitled to your full tax credits.
If your income is also taxed abroad in a country with which the Republic of Ireland has a double taxation agreement you will be given relief as specified in the relevant agreement. This is normally provided by either exempting the income from tax in one of the countries or by crediting the foreign tax paid against your Irish tax liability on the same income.
There are specific rules governing residence and non-residence for tax purposes, you may also be entitled to some additional allowances/reliefs as an Irish resident working in Northern Ireland for e.g. Trans-border Workers Relief.
Your Irish employment income will be chargeable to tax at source in Ireland.
As you will remain Northern Ireland tax resident, you must continue to declare worldwide earnings in the UK and claim double taxation relief for Irish tax suffered.
If during the tax year in question you are a resident of another Member State of the European Union i.e. UK and 75% or more of your world-wide income for this year is taxable in Ireland you will be entitled to full tax credits and reliefs in Ireland. Otherwise proportionate credits and reliefs are available to non-resident Irish citizens, to citizens, subjects or nationals of another European Union Member State and to residents or nationals of a country with which Ireland has a double taxation agreement that provides for such allowances. The proportion of credits is determined by the relationship between your income for the tax year that is subject to Irish tax, over your income from all other sources.
In relation to your employment income, you will pay tax in the country where you carry out your duties i.e. Ireland. Your income will be subject to Irish PAYE, PRSI and USC. As a resident of Northern Ireland, you will be obliged to submit an annual self assessment tax return in HMRC to declare your worldwide income. This will include income from your self-employment and your employment income from Ireland. The UK has a double taxation agreement with Ireland and therefore you will receive relief for Irish PAYE and USC suffered in Ireland.
Any balance of tax due is payable in Northern Ireland.
You could get Working Tax Credit if you live in Northern Ireland, but travel to Ireland across the border to work – but you’ll need to return to Northern Ireland regularly, for example every day or weekly. The Childcare Element of the Working Tax Credit may also be awarded provided your child is with a registered child minder located in Northern Ireland.
If you don’t have a PPS number already, you should contact your local PPS Number Allocation Centre who will assist you with the registration process. You can find contact details for your local office on the Department of Social Protection website. It is probably best that you locate the one closet to your employer in Ireland. As you are non-resident, attendance at your local PPS Centre may not be applicable, you will be advised accordingly. You will be asked to produce documentary evidence of identity and residence. The complete list of documents required can be found on the Department of Social Protection web page – PPS Number – How to Apply. Before you can be allocated a PPS Number, you must show that you need one for example, if you are taking up employment and you need a PPS Number to register with the Revenue Commissioners.
You will need to call Jobcentre Plus to apply for a National Insurance number. You must have the right to work or study in the UK to get a National Insurance number. Jobcentre Plus - National Insurance number allocation service - Telephone: 0345 600 0643 Jobcentre Plus may write to you and ask you to come to an interview where you’ll be asked about your circumstances and why you need a National Insurance number. The letter will also tell you which documents to bring to prove your identity, e.g. Passport, drivers licence etc. You’ll be told at the interview how long it’ll take to receive your National Insurance number.