Reply to: Contracting in Ireland using UK Ltd Company

[stek]

OP said has a PPSN.

Yeah sorry missed that.

Safe to say OP isn’t registered with the Revenue Commissioners, has a PPSN, so an Irish address.

I’d imagine a tax return dropping through the door at some point?

[northernladyuk]

The most tax efficient solution in Ireland is Director Umbrella, and as you are working here you’ll pay Irish tax on everything so better get used to it!

I’ve accepted it, cos I like it here and the whole place is more relaxed.

Have you no PSN? What if you get ill?

OP said has a PPSN.

[stek]

northernladyuk, they have advised me something very similar to what you hereby said:
pay IT over salary carried out in UK, and all the rest remitted to Ireland as dividends...
I definitely don't want to use an Umbrella solution, first because I don't see it as necessary in my case, and second I'd rather go permy!

The most tax efficient solution in Ireland is Director Umbrella, and as you are working here you’ll pay Irish tax on everything so better get used to it!

I’ve accepted it, cos I like it here and the whole place is more relaxed.

Have you no PSN? What if you get ill?

[stek]

Yes, I' m an EU citizen.
By the EU laws, you are allowed to have UK Ltd company and get contracts around EEA...

You are but you are not free to choose the tax regime you prefer.

You work in Ireland pay tax in Ireland. Also company pays uk tax and adjusted for Irish tax already paid.

Very messy doing it that way hence awkward better to take the brolly hit when contacting mid-short term in EU, or engage a specialist EU tax advisor not cheap...

[northernladyuk]

Yes, tax over divis applies.
Could you please provide more information on this Director's Umbrella and link to calculation?

Thanks!

If you are paying Irish tax on divis, then, I think you pay tax on it as income, therefore approx. 50%, once you are past the very low threshold. And you've already paid UK CT on the gross amount. I think you need more advice! You're in a very complicated position.

Icon Accounting – Director Umbrella Company

[coolkat]

Did they tell you whether you need to pay personal tax in Ireland on the dividends?

BTW, a Director's Umbrella is different from an Umbrella. You get some self-employed type beneficial tax rates but they're not great.

Yes, tax over divis applies.
Could you please provide more information on this Director's Umbrella and link to calculation?

Thanks!

[northernladyuk]

northernladyuk, they have advised me something very similar to what you hereby said:
pay IT over salary carried out in UK, and all the rest remitted to Ireland as dividends...
I definitely don't want to use an Umbrella solution, first because I don't see it as necessary in my case, and second I'd rather go permy!

Did they tell you whether you need to pay personal tax in Ireland on the dividends?

BTW, a Director's Umbrella is different from an Umbrella. You get some self-employed type beneficial tax rates but they're not great.

[coolkat]

Professional advice needed again, but you run the risk of having to declare those divis on your Irish self-assessment (not because of currency but because it arises from work undertaken in Ireland and you are Irish resident and tax resident). You are then paying UK CT, and full Irish tax on the divis. Better if there is a way of paying back divis (error? Director's Loan? again needs advice) and then paying it as Irish salary through some kind of payroll solution or Irish Director's umbrella. The tax hit will be massive but you know that.

You need to find a way of dealing with what you've already paid to yourself as UK salary with UK NI paid to HMRC.

What did OSK advise?

northernladyuk, they have advised me something very similar to what you hereby said:
pay IT over salary carried out in UK, and all the rest remitted to Ireland as dividends...
I definitely don't want to use an Umbrella solution, first because I don't see it as necessary in my case, and second I'd rather go permy!

[northernladyuk]

I haven't set up anything in Ireland yet.
Everything is UK based up until now.
I have being paying dividends in EUR though...

Professional advice needed again, but you run the risk of having to declare those divis on your Irish self-assessment (not because of currency but because it arises from work undertaken in Ireland and you are Irish resident and tax resident). You are then paying UK CT, and full Irish tax on the divis. Better if there is a way of paying back divis (error? Director's Loan? again needs advice) and then paying it as Irish salary through some kind of payroll solution or Irish Director's umbrella. The tax hit will be massive but you know that.

You need to find a way of dealing with what you've already paid to yourself as UK salary with UK NI paid to HMRC.

What did OSK advise?

[coolkat]

Not having a PPSN would be worse!

OK - so you are paying NI on the salary in the UK. Presumably no income tax as under threshold. Firstly, you are resident in Ireland and working in Ireland, so you should be paying tax on that income in Ireland.

Next, have you been taking divis?

I haven't set up anything in Ireland yet.
Everything is UK based up until now.
I have being paying dividends in EUR though...

[coolkat]

Where have you been paying personal tax for the last 8 months?

I have been paying NI in the UK (IT not liable), CT and DT haven't being paid yet since my UK accountant has not yet filed for anual tax returns...

[northernladyuk]

I haven't paid UK CT, just NI on salary.
I do have a PPS number, but how does that change anything?

Not having a PPSN would be worse!

OK - so you are paying NI on the salary in the UK. Presumably no income tax as under threshold. Firstly, you are resident in Ireland and working in Ireland, so you should be paying tax on that income in Ireland.

Next, have you been taking divis?

[WTFH]

I haven't paid UK CT, just NI on salary.
I do have a PPS number, but how does that change anything?

Where have you been paying personal tax for the last 8 months?

[coolkat]

You possibly can pay divis, but you'd have to pay Irish taxes on it - and it is taxed as Irish salary. And you've already paid UK CT.


OP, do you even have a PPSN?

I haven't paid UK CT, just NI on salary.
I do have a PPS number, but how does that change anything?

[northernladyuk]

So, by being tax resident in Ireland, his personal tax should be paid there at Irish tax rates.
Separate to that, if he wants to run it through his UK company, then it should be paying the relevant UK taxes on its business, then paying him.

If he explains his full story to his accountant, and his accountant is versed in UK and Irish tax laws, then it should be fairly straightforward to sort out. It won't be efficient at any level, but it should be straightforward.
Inefficiencies include:
1. Foreign currency conversion costs on the company money coming in.
2. Full company taxes being UK payable.
3. No dividends etc from UK company - everything has to go out as salary.
4. Salary needs converting back to EUR to be spendable
5. Doubtful on the accommodation being able to come out of company funds.
6. The occasional trip to the UK definitely not being expensable.

I'd definitely go with some of the suggestions above, rather than trying to do it yourself. I'm also very concerned that you say you have a UK accountant, but for the last 8 months they've been happy with the way you have been running your business.
I suspect your accountant is going to have fun trying to work out your personal tax return to April 16. It sounds like a bit of a train smash to me.

You possibly can pay divis, but you'd have to pay Irish taxes on it - and it is taxed as Irish salary. And you've already paid UK CT.


OP, do you even have a PPSN?