Government denies remote workers along Border ‘face double tax’

The Department of Finance has denied that thousands of employees working along the Border could be taxed twice on their income by working remotely under new public health regulations, following warnings from a new representative group.

The Cross-Border Workers Coalition is an alliance of individual employees who live in the Republic but work in Northern Ireland.

The group has sought clarity as to how the Government will support cross-Border workers who, it said, face losing home-working support due to the relaxation of Covid-19 rules in the Republic.

The group claims that under current legislation cross-Border workers, who live in the Republic but work in Northern Ireland, can face a “double tax”, both from London and Revenue if they work from home.

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The Government temporarily waived this requirement in March 2020, but with support only being offered when home-working guidance is in place, the group fears that employees are now set to effectively lose all remote-working flexibility.

A spokesman for the Department of Finance said trans-border workers’ relief may apply in the case of an individual who is resident in the State but who commutes to his or her place of work outside the State in any country with which the Republic has a double-taxation agreement.

“Where the trans-border workers’ relief applies in the case of an Irish resident who works in the UK, it operates in such a way that only UK tax is charged on the employment income and there is no charge to Irish tax on the same income,” said the spokesman. “Any additional Irish tax that may be due is foregone.

“Where trans-border workers’ relief does not apply, a person resident in Ireland but working in another jurisdiction with which Ireland has a double-tax treaty, will be liable for personal tax in Ireland as well as in that other jurisdiction.

“However, it is important to note that in practice there is no double taxation. If the work is carried out in another jurisdiction, the person does not face taxation from two jurisdictions at the same time.

“Rather, he or she will pay the foreign employment tax and, subsequently, file a tax return to Revenue, claim a credit for the foreign tax paid and will pay any difference between the foreign tax paid on the income received and the Irish tax due on that income.

PAYE

“If the person performs some of their work in Ireland, the foreign employer would be obliged to register as an employer for PAYE purposes and operate PAYE on the portion of the salary attributable to the duties performed in Ireland.

“Again, the person does not face taxation from two jurisdictions at the same time.”

The department added that it was “simply not correct” to say that if the Revenue concession on trans-border workers’ relief is not extended or made permanent, that such persons will be prevented from working remotely. “This is not true,” said the spokesman.

“Where they work remotely, they may pay the same amount of Irish tax as other Irish residents. This is the situation that applied before March 2020 and would mean simply reverting to the pre-pandemic treatment of trans-border workers.”