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Welcome to Eures Cross Border Tax Seminar Tuesday 24 th May 2016 Bishop’s Gate Welcome to Eures Cross Border Tax Seminar Tuesday 24 th May 2016 Bishop’s Gate Hotel 8. 30 am – 10. 00 am @Derry_Chamber #eurestaxseminar

EURES IE/NI Cross Border Partnership Sinead Mc. Laughlin CEO Londonderry Chamber EURES Steering Committee EURES IE/NI Cross Border Partnership Sinead Mc. Laughlin CEO Londonderry Chamber EURES Steering Committee member & EURES Adviser @Derry_Chamber #eurestaxseminar

Objectives • To help citizens access employment opportunities, and to provide information on employment Objectives • To help citizens access employment opportunities, and to provide information on employment related issues eg social security information on both sides of the border. • To help employers by providing them with access to the larger pool of labour in this cross border region. Advice is also provided to employers on a range of cross-border recruitment issues. @Derry_Chamber #eurestaxseminar

Priorities • Promote the recruitment of people living in the Border region • Address Priorities • Promote the recruitment of people living in the Border region • Address skills mismatches and employment bottlenecks in the region • Provide information and recruitment service for employers, workers and jobseekers @Derry_Chamber #eurestaxseminar

Who is involved? Who are we? There are seven organisations, from both sides of Who is involved? Who are we? There are seven organisations, from both sides of the border, represented on the Partnership. These are (in alphabetical order): • Confederation of British Industry (CBI) • Department for Communities (DC) • Department of Social Protection (DSP) • Dundalk Chamber of Commerce • Irish Business and Employers’ Confederation (IBEC) • Irish Congress of Trade Unions (ICTU) • Londonderry Chamber of Commerce @Derry_Chamber #eurestaxseminar

How can we help you? Activities • New ! On line Jobs Fair for How can we help you? Activities • New ! On line Jobs Fair for ICT & Language skills shortages – Belfast September • 2 On site Job Fairs in the Border region • 2 SME supports events • 2 Cross Border Social Security Tax breakfasts • Website www. eurescrossborder. org being developed • Information packs & FAQ booklet on Mobility in the IE/NI Border Region (available to you here today) @Derry_Chamber • Advisory & Recruitment Service #eurestaxseminar

EURES Advisers in the Partnership • Lee Downey – Employer Engagement Unit, Department of EURES Advisers in the Partnership • Lee Downey – Employer Engagement Unit, Department of Social Protection, Letterkenny – lee/[email protected] ie 00 (353) 74 -9120500 • Stephen Hanna – Employer Engagement Unit, Department of Social Protection, Dundalk Stephen. [email protected] ie 00(353) 42 -9392675 • Anne-Marie Bingham – EURES- Department for Communities – Belfast – annemarie. [email protected] gov. uk – 00 (44) 2890252141 @Derry_Chamber #eurestaxseminar

EURES advisers in the Partnerships • Paula Kane – EURES – Department for Communities, EURES advisers in the Partnerships • Paula Kane – EURES – Department for Communities, Belfast Paula. [email protected] gov. uk 00(44) 2890252070 • Sinead Mc. Laughlin – Londonderry Chamber of Commerce – e-mail [email protected] co. uk Tel – 0044 2871 262379 • Brenda Mc. Geeney – Dundalk Chamber of Commerce [email protected] ie 00(353) 42 9392671 @Derry_Chamber #eurestaxseminar

Thank you! • This seminar has received financial support from the European Union Programme Thank you! • This seminar has received financial support from the European Union Programme for Employment and Social Innovation "Ea. SI" (2014 -2020). For further information please consult: http: //ec. europa. eu/social/easi @Derry_Chamber #eurestaxseminar

Taxation Implications for Cross Border Employers Rose Tierney @Derry_Chamber #eurestaxseminar Taxation Implications for Cross Border Employers Rose Tierney @Derry_Chamber #eurestaxseminar

1. Tax Implications for Employers employing Cross Border Workers or having staff working on 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. @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment 1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment in NI • UK Tax year runs from 6 April to 5 April. • Personal Allowance 2015/16 £ 10, 600 & 2016/17 £ 11, 000 • Rates on income – 20% first £ 31, 785 2015/16 £ 32, 000 2016/17 - lower rate – 40% £ 31, 786 2015/16 £ 32, 001 2016/17 up to £ 150, 000 - higher rate – 45% over £ 150, 000 - additional rate • Rates on gross dividends – 10% in lower tax band in 2015/16. 7. 5% in 2016/17. – 32. 5% (on gross dividend) in higher tax band for 2015/16 & 2016/17 with 10% tax credit in 2015/16. – 37. 5% in additional rate band in 2015/16 with 10% tax credit for 2015/16. 38. 1% for 2016/17. – In 2016/17 the first £ 5, 000 of dividends received by individual taxpayers will be taxed at 0% which ever tax band the dividends fall into. @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment 1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment in NI NIC Rates • Class 1 Employees • 12% - £ 155 - £ 815 per week • 2% - over £ 815 per week • Employers • 13. 8% - over £ 156 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 @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment 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 assessment of spouses may be preferable. @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (a) ROI Resident Employee Taking up Employment 1. Employees - Working Across the Border (a) 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 salaries and pensions • The relief is that the income is only taxed in the state of employment and not in their home state. • Eg ROI resident would not be taxed in the ROI on the employment income from government service in the UK. • What is government service? • 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 @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (b) NI Resident Employee Taking up Employment 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. @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border • (b) NI Resident Employee Taking up 1. Employees - Working Across the Border • (b) NI Resident Employee Taking up Employment in ROI • Tax Rates on income – 20% first € 33, 800 (Single) up to € 67, 600 (Married) - lower rate – Balance at 40% - marginal rate • Personal Tax Credit 2016 € 1, 650 (Single) € 3, 300 (Married) • Employee Tax Credit 2016 € 1, 650 • Earned Income Tax Credit (proprietary directors) € 550 @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (b) NI Resident Employee Taking up Employment 1. Employees - Working Across the Border (b) NI Resident Employee Taking up Employment in • • ROI Universal Social Charge ("USC") – 1% on the first € 12, 012 – 3% on next € 6, 656 – 5. 5% on next € 51, 376 – 8% on the balance Capped at 3% 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 @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (b) NI Resident Employee Taking up Employment 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. 75% - on total earnings where they exceed € 376 per week • 8. 5% - on total earnings where they do not exceed € 376 per week @Derry_Chamber #eurestaxseminar

1. Employees - Working Across the Border (b) NI Resident Employee Taking up Employment 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 SA 100) 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 • 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 !! @Derry_Chamber #eurestaxseminar

2. Employers Employing Cross Border Workers (a) ROI Employer Taking on NI Employee to 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 credit certificate using Form 12 A. • Employer will receive notice of tax credit - P 2 C - in the ROS Inbox. Until tax credits certificate is received emergency basis of taxation applies. (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. • Form P 46 will need to be filed online to apply for the correct tax code for the employee. @Derry_Chamber #eurestaxseminar

3. The Tax Implications of Having Staff Working on Either Side of the Border 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 • 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 TR 1/TR 2. • The 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 • Where days spent >60 <183 not required to register provided conditions satisfied @Derry_Chamber #eurestaxseminar

3. The Tax Implications of Having Staff Working on Either Side of the Border 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). • 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 www. hmrc. gov. uk. • 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. @Derry_Chamber #eurestaxseminar

Other Issues • UK Workplace Pension • Automatic enrolment’ • Every employer must automatically Other Issues • 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 @Derry_Chamber #eurestaxseminar

Workplace Pension • The law says a minimum percentage of your ‘qualifying earnings’ must 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, 824 and £ 42, 385 a year • your entire salary or wages before tax @Derry_Chamber #eurestaxseminar

Workplace Pension • Your employer chooses how to work out your qualifying earnings. • Workplace Pension • Your employer chooses how to work out your qualifying earnings. • You pay Your employer pays Govt pays • 0. 8% 1% 0. 2% • rising to 4% rising to 3% rising to 1% of your ‘qualifying earnings’ by 2018 @Derry_Chamber #eurestaxseminar

Pensions • Cross Border – Ensure payment made to scheme in country where income 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. @Derry_Chamber #eurestaxseminar

Termination Payment ROI – Tax free ex gratia limited to lower of SCSB or Termination Payment ROI – Tax free ex gratia limited to lower of SCSB or € 200, 000 – lifetime limit – Relief foreign service – Payments for injury, disability or death not subject to 200 k cap UK – First £ 30, 000 is exempt – Statutory redundancy is included in £ 30, 000 – Relief foreign service in some cases @Derry_Chamber #eurestaxseminar

Termination Payment • A period of service counts as “foreign service” where the earnings 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 @Derry_Chamber #eurestaxseminar

Cross Border Social Insurance Activities in One Member State Temporary Transfer • Employed person Cross Border Social Insurance Activities in One Member State Temporary Transfer • Employed person who is • Employed person subject to the temporarily posted to work in legislation of the State in which he another Member State for the pursues his activity same employer can continue to be • eg John is Resident in ROI subject to the legislation of the working in NI subject to UK NIC first State provided the posting on employment earnings. does not exceed 24 months and he is not sent to replace another person • eg John employed in ROI is posted to work in the UK for 18 months – continues to pay ROI PRSI @Derry_Chamber #eurestaxseminar

Cross Border Social Insurance Activities in More than One Member State • Employed person Cross Border Social Insurance Activities in More than One Member State • Employed person is : • Employed Person is : – subject to the legislation of the State of residence if some of his employment activity is in that State or if he pursues activities for a number of different employers in different Member States – Eg Joe lives in NI works as a salesman for an employer in ROI but covers the Border Counties of NI as well as Leinster in ROI – subject to NIC on earnings. • • Subject to the legislation of the State in which the registered office of the employer is situate if he doesn’t pursue any of the employment activity in his State of residence Eg Joe gets a new role with the company and his job takes him to Germany, Poland Holland – subject to PRSI in ROI where registered office of his employer is situated @Derry_Chamber #eurestaxseminar

Cross Border Social Insurance Both Employed and Self Employed in Different Member States • Cross Border Social Insurance Both Employed and Self Employed in Different Member States • Subject to the legislation of the State of employment • If employed in more than one State – subject to the legislation of the State of residence if some of his employment activity is in that State or if he pursues activities for a number of different employers in different Member States or – Subject to the legislation of the State in which the registered office of the employer is situate if he doesn’t pursue any of the employment activity in his State of residence • Eg. Sean is self employed computer consultant and is based in ROI but also has parttime employment with a company in ROI and another in UK • He must pay PRSI on his earnings @Derry_Chamber #eurestaxseminar

 • EU and Bilateral agreements allow the Social Contributions made in EU and • 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. @Derry_Chamber #eurestaxseminar

Claiming Entitlements • Jobseekers – For those on intermittent part-time hours benefits should always Claiming Entitlements • Jobseekers – For those on intermittent part-time 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 p. RSI can be combined to arrive at entitlements @Derry_Chamber #eurestaxseminar

Claiming Entitlements • Illness – Benefits should normally be claimed in jurisdiction where you Claiming Entitlements • Illness – Benefits should normally be claimed in jurisdiction where you last worked • Maternity – Benefits should normally be claimed in jurisdiction where you last worked @Derry_Chamber #eurestaxseminar

Claiming Entitlements • Healthcare – While employed in NI the ROI resident individual (but 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 @Derry_Chamber #eurestaxseminar

 • Useful Contact on Pension Entitlements • Brendan Casey- PRSI Consultant – Email: • Useful Contact on Pension Entitlements • Brendan Casey- PRSI Consultant – Email: brendan. was. [email protected] com @Derry_Chamber #eurestaxseminar

Questions? • • Contact Details: Rose Tierney Tel: +353 47 57843 Email: rose@tierneytax. ie Questions? • • Contact Details: Rose Tierney Tel: +353 47 57843 Email: [email protected] ie @Derry_Chamber #eurestaxseminar

Gavin Killeen President Londonderry Chamber of Commerce @Derry_Chamber #eurestaxseminar Gavin Killeen President Londonderry Chamber of Commerce @Derry_Chamber #eurestaxseminar