WFH tax credit and employed in NI

waterman

Registered User
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37
Hello,

My income is wholly earned working for an NI company. I live in IRL. I pay my tax etc direct from my NI pay.

Every year I go to an accountant and do a tax return in IRL (I'm the only person I know who does this. What can I say I'm an honest fool). And every year the dept of revenue is happy to take a few extra hundred in tax from me.

Basically how it works is they:
  1. look at how much I earned in NI, covert to EUR and calculate if I earned this amount in IRL I would have paid "X" amount of tax.
  2. look at how much tax I paid in NI and covert to EUR, let's call this "Y"
  3. They then subtract X - Y and whatever is left I end up paying the dept of Revenue the balance lets call it "Z". And there is always a balance!

This year being no different. I enquired about the WFH tax credit as I've essentially being working from home in IRL since March 2020. The department say I do not qualify for this tax credit as and I quote:

"I have had a look at the legislation and consulted with my supervisors and as the Income is foreign and the tax paid is outside the jurisdiction, the claim for Remote working expenses must be made in the jurisdiction where the tax is paid."

Would the wise people of askaboutmoney agree with this? If they are more than happy to take a cut of my "foregin income" why will they not give me the WFH credit?

From my simple understanding they are saying I need to make my "Y" (tax paid in NI) smaller which sounds great however I will just end up paying the Dept of revenue a larger "Z"!! So to me is completely pointless me claiming the credit in NI!

Thoughts?
 
Hello,

My income is wholly earned working for an NI company. I live in IRL. I pay my tax etc direct from my NI pay.

Every year I go to an accountant and do a tax return in IRL (I'm the only person I know who does this. What can I say I'm an honest fool). And every year the dept of revenue is happy to take a few extra hundred in tax from me.

Basically how it works is they:
  1. look at how much I earned in NI, covert to EUR and calculate if I earned this amount in IRL I would have paid "X" amount of tax.
  2. look at how much tax I paid in NI and covert to EUR, let's call this "Y"
  3. They then subtract X - Y and whatever is left I end up paying the dept of Revenue the balance lets call it "Z". And there is always a balance!

This year being no different. I enquired about the WFH tax credit as I've essentially being working from home in IRL since March 2020. The department say I do not qualify for this tax credit as and I quote:

"I have had a look at the legislation and consulted with my supervisors and as the Income is foreign and the tax paid is outside the jurisdiction, the claim for Remote working expenses must be made in the jurisdiction where the tax is paid."

Would the wise people of askaboutmoney agree with this? If they are more than happy to take a cut of my "foregin income" why will they not give me the WFH credit?

From my simple understanding they are saying I need to make my "Y" (tax paid in NI) smaller which sounds great however I will just end up paying the Dept of revenue a larger "Z"!! So to me is completely pointless me claiming the credit in NI!

Thoughts?
For the sake of very little money I would not bother at all wasting any time trying to claim this in Ireland. See if NI Revenue has a similar relief, albeit it might not help much anyways.
 
For the sake of very little money I would not bother at all wasting any time trying to claim this in Ireland. See if NI Revenue has a similar relief, albeit it might not help much anyways.
But that's the very point. Every Euro the OP gets in tax relief on his NI tax bill, gets added straight back onto his Irish tax bill!
 
Your NI income is not treated the same as employment income for Irish income tax purposes.

Foreign income is taxed under Schedule D Case III, whereas income from an employment exercised in the State is taxed under Schedule E.

The provisions for deductions like the relief for WFH relate to income under Schedule E, and don't apply to Case III. So the answer you got is correct, if your employment income is Case III.

A separate question is whether your employer ought to be registering for Irish payroll taxes if they are mandating you to perform your duties substantively in Ireland.
 
But that's the very point. Every Euro the OP gets in tax relief on his NI tax bill, gets added straight back onto his Irish tax bill!

Yes that is how I see it. In all honesty I do not see the point in me claiming any tax credit in NI as IRL revenue just add it all back on!
 
Are you not due trans border relief on your NI income? If you've no other income, I don't think you need to pay any extra Irish tax.
 
Are you not due trans border relief on your NI income? If you've no other income, I don't think you need to pay any extra Irish tax.

I do get the trans border relief but revenue like to take a wee bit on top.

However if you have any official link that would confirm there is no need for me to be doing this I'd love to have it.
 
That's interesting.

I think I may be more like example one to be honest as my wife does not work i.e all our income is earned in NI by me.

Or would you think I fall into Example 2 as I'm married?
 
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That's interesting.

I think I may be more like example one to be honest as my wife does not work i.e all our income is earned in NI by me.

Or would you think I fall into Example 2 as I'm married?
Setting the foreign income to 0 in the second example ends up with no tax due as well. I'd check this with your accountant if I were you.
 
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