Working for and getting paid from a UK company, working from home in Ireland

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dazzerb

Registered User
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I have an opportunity to move to Ireland and work from home working for a UK company. The UK company has no offices or businesses in Ireland so no ability to pay from here.

How might this work? I assume I would need to pay Irish taxes but UK company would have no way to withhold them I assume. Do I need to pay any UK taxes? Also can they pay me in sterling and not withhold anything and I just take care of the taxes myself in Ireland.

I assume this is a common situation and I googled a bit but not finding anything.

One option would be for me to quit and work as a private contractor and just invoice them monthly.

What other options might I have?

Thanks for your help.
 
I supply services to uk companies.

I am an irish business and pay my tax in ireland. The uk companies pay me the total amounts owed directly in account and do not withhold any monies.

My understanding is that witholding taxs is designed to protect the revenue from non payment, as you will have no liability to the uk revenue then there is no case for WT.

I have bank accounts in NI and they pay into there to allow me somne control on the exchange rates and the timing of that exchange.
 
dazzerb, correct me if I'm wrong, but I think your case may be more complicated by the fact that you sound as if you are an employee of the UK company and not a self employed individual in business in your own right who happens to be providing services to this UK company.

If you are an employee of the UK company who is going to move to Ireland and provide services exckusively to the UK company and under directioon from that company then there are Irish tax issues for the company to consider.

For example, depending on the work you are carrying out here, you may create a permanent establishment for the UK co in Ireland aand the company may come within the charge to Irish corporation tax.

Also, if you are an employee of the UK company and based pretty much full time in Ireland then the UK company will need to operate Irish PAYE on your salary.

These are just two of the issues but I think it would certainly be worthwhile getting professional advice, probably more for the UK co than you.
 
Sorry for butting in on your thread..
I've got a similar issue with an added twist. Im irish just about to start contracting work for a UK company but living in New zealand. Im not sure whether i should set up a company in New zealand, UK or set up an irish company to invoice from. Any thoughts? Im on a 1 year working holiday visa in nz so im not sure if im even allowed to set up a company here in new zealand.
 
dazzerb said:
I have an opportunity to move to Ireland and work from home working for a UK company. The UK company has no offices or businesses in Ireland so no ability to pay from here.

How might this work? I assume I would need to pay Irish taxes but UK company would have no way to withhold them I assume. Do I need to pay any UK taxes? Also can they pay me in sterling and not withhold anything and I just take care of the taxes myself in Ireland.

I assume this is a common situation and I googled a bit but not finding anything.

One option would be for me to quit and work as a private contractor and just invoice them monthly.

What other options might I have?

Thanks for your help.
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As an employee carrying out your duties in Ireland you should be paying tax under the PAYE system in Ireland. Your UK employer should register with the CRO as a foreign company and then register with Revenue as an employer. They can then operate Irish PAYE on your salary.

It's not as complicated as it sounds, relatively straightforward process (but can take CRO/Revenue a few months to process it).

The other alternative is for you to set up your own Irish company and invoice them as a contractor, but in that case you're losing all your accumulated employee rights/benefits so that may not suit you.

In theory you could invoice them as a sole-trader but the Irish revenue may not accept that you are genuinely self-employed, and while your taxes may be correct you would not be paying the correct PRSI.

Regards

podowd
http://www.prima.ie
 
steve1234 said:
Sorry for butting in on your thread..
I've got a similar issue with an added twist. Im irish just about to start contracting work for a UK company but living in New zealand. Im not sure whether i should set up a company in New zealand, UK or set up an irish company to invoice from. Any thoughts? Im on a 1 year working holiday visa in nz so im not sure if im even allowed to set up a company here in new zealand.
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I don't know what the NZ rules are, but if they are the same as Ireland (which would be my guess) your visa won't permit you to set up a business, either as a company or as a sole trader. Working Holiday visas usually only allow you to be employed by a company, so you may need to use a local umbrella company provider for your contract

Regards

podowd
www.prima.ie
 
number7 - I assume you have your own company or work as a private contractor. Your situation is definitely an option for me but I would have to quit the job and work for myself. This is not necessarily a issue for me. The company however would prefer if I remain an employee. Do you have any issues moving money from NI and ROI banks or do you just use your NI bank as your normal bank?

I think Breninio is correct when he advises me of the company to seeking professional tax advise. I want to make move as easy and hassle free on the UK company so they do not change their mind!!!

steve1234 - no problem butting in. Would like to hear how your situation works out too.

Thanks everyone.
 
A company I worked for had 2 UK based employees previously but we have no UK presence. We simply hired a payroll company in the UK at a minimal cost to process the payroll for these 2 and tell us what taxes to pay and when. I assume this could easily be done the other way around to suit your situation.
 
If there were two employees of the company operating from a fixed place of business in the UK (this could be an office at home, or a client site i.e. it does not have to be aproperty owened or leased by the employer in the UK)) on a long term basis then it is very likely that a permanenet establishment was created in the UK. There are some exceptions (i.e. if the duties carried out in the UK related exclusively to preparatory, auxilliary duties). However other than that I don't see how a permanent establishment was avoided in the UK.
 
Hi dazzerb,

My wife did exactly the same thing when we moved back from the UK to Ireland, She continued to work and get paid through the UK, but worked from home in Ireland. It is relatively simple to sort out.

1. Contact your local revenue office. They will treat you as self employed. In the meantime continue to pay tax in the UK through PAYE as normal.
2. At the end of the year fill in your tax return detailing exactly what tax you paid in the UK.
3. The revenue will calculate your Irish tax liability by working out what tax you would have paid on your earnings if you had earned the same amount in ireland. They will take away any tax you paid in the UK as there is a double taxation agreement. You then pay the balance. We found we had to pay more, but this depends on your own situation.
4. You will pay national Insurance in the UK, so no matter what revenue tell you, you do NOT have to pay PRSI or Health Levy. It took us 3 appeals for them to agree that this was the case.
5. I have a good accountant who knows how to fill in the tax return for this scenario, and knows the rules on Health Levy and PRSI even when some people in revenue do not. PM me if you want details. He can work by email/scanning etc so it doesn't matter where you are.

Lochy
 
Lochy said:
It is relatively simple to sort out.
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Everything is simple to sort out if you ignore any of the complicating factors! If your wife returned to Ireland, remained employed by the UK company (although now carried out duties full time for that UK company in Ireland) then she was not self employed, she was an employee of the UK company carrying out duties in Ireland. If she was a contractor providing services to this UK comapny as well as other clients then it is a different story, however if UK PAYE continued to be operated this does not seem to be the case. If your wife returned to Ireland post 2006 then Irish PAYE should have been operated. Also, irrespective of when your wife returned, then there would certainly be Irish corporation tax issues for the company to consider. As I say, tax is very simple when you choose the simple route rather than the correct one.
 
It is simple. Which is why my first suggestion was to phone the revenue. They will confirm everything I have said is correct. The original post was not that their company is setting up an irish operation, but that the person was simply going to be working from home. 2 different scenarios.


My wife has been working in this manner for over 3 years now(with 2 different companies) and we have all this confirmed in writing by the revenue. WIth regard to "complicating factors", I have been through this process personally and my initial post is correct.
 
So you have a letter from Revenue that states that even though your wife is employed by a UK company and carries out the duties of her employment for that company in Ireland on a full time basis, Irish PAYE need not be operated on that income? And the letter also explicitly states that the activities carried on by your wife on behalf of that UK company does not create a permanent establishment in Ireland for that company and give rise to corporation tax issues? That is a letter I would like to see and I would recommend that you hang on to in case Revenue look into it as both statements are incorrect. Or more to the point, your wifes employer would need to have to hand if Revenue come calling as it is more a tax exposure for them than your wife (at least your wife is filing self employed tax returns). Irish PAYE should be operated on your wifes income and Revenue could argue that the payments she is receiving is net of Irish PAYE and look for the UK company to gross up those net payments and pay over the PAYE with interest and penalties. In addition it is very possible that the UK company has an Irish corporation tax exposure and certainly a reporting obligation. Unfortunately, the people manning the phones at Revenue are not the ones to be making calls on these complex situations (although they often do). And verbal confirmations wont count for much as there is no evidence of the information provided to them on which they based their advice. You state that the UK company company is not setting up "operations" in Ireland. This is a commercial concept and is irrelevant. Under tax law, an employee of a UK company based full time in Ireland will normally create a permanent establishment of that company in Ireland.
 
You are getting some different scenarios confused. My wifes company do not operate or derive profits in Ireland. She simply works from home. That happens to be in another EU country. There are no corporation tax liabilities in this scenario.

I dont want to get into a big discussion in a long thread. I have been through this. I know the rules. I am backed up by revenue, an Irish Accountant and a UK accountant hired by my wifes company to look into potential issues. I would rather believe them than someone on a forum who doesn't understand the issues.

There is no peramanent establishment. She works from home. Where that happens to be is irrelevent. She goes to the UK about 1 in every six weeks. She logs into their server and works through the London office. She carries out UK duties.

As I said to Dazzerb this is simple. You are introducing complexities where there are none. I am correct and I have done all this with full disclosure to the revenue. I was surprised when they decided to treat my wife as self employed, but have been doing so for three years. We provide gthe revenue with my wifes P60 from her employment in the UK, so it is not as if they dont understand that she is working for a UK company.

I would suggest Dazzerb contacts the revenue and they will tell him the scenario.
 
If your wife is an employee of this UK company then my advice is correct - the Revenue, your Irish tax advice and your UK tax advice are incorrect. I understand the issues alright and have dealt with them many times before. How can your wife be self employed if she is an employee of this UK company?
 
Breninio said:
If your wife is an employee of this UK company then my advice is correct - the Revenue, your Irish tax advice and your UK tax advice are incorrect. I understand the issues alright and have dealt with them many times before. How can your wife be self employed if she is an employee of this UK company?
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I cant agree. I have dealt with these issues personally. She is treated as self-employed for Irish tax purposes in that she must fill in an annual tax form, and can pay tax in advance if needed.All the tax is initially paid in the UK, and she pays any balance at the end of the year. My advice is correct. Her company checked this all out through accountants and tax lawyers.

She is treated as self-employed as although she resides in Ireland full time, she earns money outside the state(the UK). The company has no Irish payroll and no irish presence. so she cannot pay Irish PAYE directly. Therefore she declares her tax liabilities as if she was self-employed.
We will not agree on this, which is why I have suggested to dazzerb that their first port of call must be the revenue.
 
The treatment you outline would have been correct pre 2006. However since 2006 this is not case. See link below to Revenue website.

[broken link removed]
 
Depends on interpretation of "duties outside the state". All the work is done through the UK office for UK and international clients, so all her duties are in the UK. She just logs in from ireland. b is relevent in this situation, so not within the irish PAYE situation.

Talk to the revenue. they will confirm this
 
There is nothing to interpret in the words "duties outside the State". If you are physically in Ireland, performing work duties, then those duties are Irish work duties. Simple. I don't need to call Revenue.I know I am correct.
 
Breninio said:
There is nothing to interpret in the words "duties outside the State". If you are physically in Ireland, performing work duties, then those duties are Irish work duties. Simple. I don't need to call Revenue.I know I am correct.
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You are deemed a virtual worker. Where you work is up to you, but you have a UK employment contract for working within the UK.

You are working through the Uk, for a UK company working on projects in the UK. Your duties are outside the state. Physical location is irrelevent.

Contact revenue. They will confirm this....
 
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