Contract work in UK - tax issue.

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Curious11

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My partner is likely going to be offered a contract in the UK for roughly a six-month period with an option to extend this (if he impresses). I'm just wondering whether he would still be treated as an Irish resident for the whole tax year or would he be liable to pay tax solely in the UK for those six months?

Is there any way of choosing which country you pay tax in, and if so which option is better?

I'm presuming that there's no similar tax free benefit to working in the UK on a short-term contract like there is for say the Middle East? Or any way of somehow reclaiming tax paid? That would be sweet...

Also, following the six-month contract there is a strong possibility he'll be moving to Australia to work so realistically he'll be working overseas for at least 7 months of the tax year 2010.

Any info appreciated.
 
Interested in hearing other's thoughts on this.

Initial reaction is: depending on the amount - and what his total annual earnings are - try and stick to Ireland, as it is a very low tax country. For illustration, the Lib Dem's radical tax reform would give people an annual tax-free allowance of €12,000, compared to what we've enjoyed in Ireland for the past few years, €18,000.

If he's already up beyond €35,000 in earnings, the marginal rates are probably quite close.
 
He's been out of work since February and the gross earnings for the six-momth contract wouldn't exceed GBP 16k.
 
Where you are taxed and whether PAYE is to be operated depends on your tax residence position, and the nature of the work and who pays you and whenther you are an employee etc.

If he is an employee of a UK company, working in the UK, the UK company will have to operate UK PAYE and NIC on his income.

If he remains tax resident in Ireland - depending on the days he spends in Ireland he will be taxable in Ireland on his UK income.

If he is not UK tax resident he may be able to reclaim the UK tax under the Double Tax Treaty. If he is UK tax resident he will have to complete a UK tax return, but will get credit for any UK tax paid by the Irish Revenue.

This is just a brief outline of a couple of possibilities. This is a complex area, dependant on many factors, and I suggest he gets professional advice.

www.taxingtimes.ie
 
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