Cross-Border workers refused mortgages

Cross-Border workers are being refused mortgages by banks and facing healthcare and welfare issues because of problems caused by different tax rules in the Republic and Northern Ireland.

The problem is even affecting employees of North/South bodies set up under the 1998 Good Friday Agreement, an all-island conference on workers’ mobility organised by the the European Economic and Social Committee and held in Dundalk Institute of Technology was told.

Currently, just one of the 65 staff employed by the all-island trade promotion agency, InterTradeIreland at its headquarters in Newry, Co Down is from the Republic, one of its executives, Colin McCabrey told the conference.

“We did actually have a lot more. They all reached the age of maturity where they were getting married and they found they couldn’t get a mortgage if they were from [the Republic] working in Northern Ireland, so they left,” he declared.

The Irish-based company revolutionising rural deliveries with drones and robotic hubs

Shelfy review: Can this device keep food in your fridge fresh for longer?

Are fears of an AI slash and burn of white-collar roles well founded?

Despite the difficulties, 18,000 people from the Republic and Northern Ireland are known to be employed by companies on the other side of the Border from where they live. In reality, a far greater number is doing so.

“A lot of them are just ignoring or burying their heads in the sand, or employees are using the well-renowned tactic of ‘grannying’, where they use the address of a relation for tax purposes,” said Ulster University’s Aidan O’Kane.

Businesses are increasingly reluctant to knowingly to hire workers from the other jurisdiction because of the onerous nature of employment rules, says Rose Tierney, the noted Monaghan-based cross-Border tax accountant.

In some cases, cross-Border workers newly employed by businesses with company healthcare plans are finding that health insurers are unwilling to offer them the same benefits as those offered previously.

“We’re seeing things as stark as some Northern businesses advertising for roles and saying “UK residents only”, which goes contrary to our ambition to be an aligned economy,” says Mr O’Kane.

“On the other side of that coin, we’re seeing businesses in the Republic of Ireland taking a very clear bias in employing those who live in that jurisdiction because it was just getting a little bit too unwieldy,” he went on.

Nearly a third of the 800 staff in US insurer, Allstate’s Derry operation once travelled daily from Co Donegal, but that number is now down to little more than 5 per cent in the wake of Brexit and the Covid pandemic.

During the height of the pandemic, the company told the Irish and British tax authorities that it would have to pay its Donegal-resident staff to stay at home and do nothing unless it got a waiver to let them work remotely within the rules.

A waiver was subsequently issued generally covering all cross-Border workers but it lapsed after the pandemic ended, though it is believed that many staff employed by small firms have continued to work under the radar, leaving them at risk.

Seeking to regularise their position, it is known that a few declared to the tax authorities that they had worked, or were working undeclared cross-Border, but paying taxes. They ended up facing a tax audit and, on occasion, a tax arrears bill in some cases.

Nevertheless, healthcare and community workers from Northern Ireland are known to have taken up better-paid jobs in the Republic, especially in the last year, or two, though often it is believed that they supply addresses in the Republic to their employer.

A big cross-Border campaign did run for a number of years to lobby the Irish Government, Stormont and the Exchequer in Dublin to agree a deal that would encourage all-island working, but it failed.

Under a European Union deal agreed last year, EU workers working for companies outside the state where they live can maintain some welfare benefits even if they spend half of their time working remotely. However, the UK is not party to the agreement.

The conference was organised by the European Economic and Social Committee together with an All-Island Advisory Group of nine representative workers, employers and civic organisations from both Ireland and Northern Ireland.