Reply to: Working in Ireland through US client

[Old Greg]

Just checked my P60 before I left, averaged 40% tax

That is about right. OP, talk to Sue at IPAYE as well who may have a different perspective.

[stek]

Your biggest problem will be accomodation in Dublin, I was Northside (rougher!) and paid €1200 month for a gloryfied shed, in central Dubs budget 1600-2000 for a room if you can find one.

And none if this is tax deductable, all you get is first three months at a rate set by the Revenue Commissioners.

[stek]

Just checked my P60 before I left, averaged 40% tax

[Old Greg]

Thanks.

One need to pay around 50% (give or take) of daily rates to Irish tax man as they don't have different rates for dividend payout. That would make working in Ireland unattractive.

Or is there a way to save on taxes (i.e. paying low salary, rest as dividend in uk). For simplicity consider daily rate of £600 (paid in gbp)

Assume you need to pay all company income as employment tax in Ireland.

But it isn't 50%. Look at this and select no for employee and yes for proprietary director and controlling shareholder.

Deloitte | Budget 2018 Tax Calculator

[siddhantkumar]

You have to pay full Irish employment taxes from day 1 for work performed in Ireland regardless of residency. Anyone who advises you otherwise is wrong. It is perfectly viable to work here with your arrangements if you have the rate right.

Thanks.

One need to pay around 50% (give or take) of daily rates to Irish tax man as they don't have different rates for dividend payout. That would make working in Ireland unattractive.

Or is there a way to save on taxes (i.e. paying low salary, rest as dividend in uk). For simplicity consider daily rate of £600 (paid in gbp)

[Old Greg]

apologies for delayed messages, being new member my replies are reviewed first and then posted to the forum.

I take it's not viable for long term to work in Ireland.

If I say work for less then 183 days in Ireland, can I continue using UK Ltd and keep getting salary in UK (and pay UK taxes, claim back travelling and accommodation as expenses)?

The current tax year would be (157 days), plus rolling 2 year I can work for 280 days before becoming resident. Am I right ?

I'm UK citizen, family will be in UK so yes I will have to maintain house back as well.

You have to pay full Irish employment taxes from day 1 for work performed in Ireland regardless of residency. Anyone who advises you otherwise is wrong. It is perfectly viable to work here with your arrangements if you have the rate right.

[Old Greg]

Agreed, but there is no real tax efficient contractor structure available in Ireland. No concept of dividends, and very little claimable as legitimate expenses.

So it.s €33.6K at 25%, then 40%, then the killer, uncapped PRSI (NI) employees and employers, 5% each, and USC (Universal Social Charge) of 4%, so look at netting around 55%.

If you’re running a place in UK too, it will cripple you, Dublin prices for accom. are super-high...

Only one lot of 5% PRSI if self employed e.g. via director's umbrella.

[siddhantkumar]

apologies for delayed messages, being new member my replies are reviewed first and then posted to the forum.

I take it's not viable for long term to work in Ireland.

If I say work for less then 183 days in Ireland, can I continue using UK Ltd and keep getting salary in UK (and pay UK taxes, claim back travelling and accommodation as expenses)?

The current tax year would be (157 days), plus rolling 2 year I can work for 280 days before becoming resident. Am I right ?

I'm UK citizen, family will be in UK so yes I will have to maintain house back as well.

[stek]

Agreed, but there is no real tax efficient contractor structure available in Ireland. No concept of dividends, and very little claimable as legitimate expenses.

So it.s €33.6K at 25%, then 40%, then the killer, uncapped PRSI (NI) employees and employers, 5% each, and USC (Universal Social Charge) of 4%, so look at netting around 55%.

If you’re running a place in UK too, it will cripple you, Dublin prices for accom. are super-high...

[Old Greg]

The Irish Revenue will have place of supply rules for VAT, but I'm pretty sure it will be outside of the scope of VAT, as it would be in the UK (unless you're delivering something covered by a specific rule, which I doubt).

In terms of US tax, YourCo will be invoicing for (and receiving) non-US-source income (the work is performed in Ireland) as a non-US-person (YourCo is not incorporated in the US), so there's no US withholding. They may ask you to complete a W8-BEN-E on behalf of YourCo. This is their responsibility (to ask and report upwards, if required), not yours.

The above assumes an Irish Ltd and that you're not a US citizen. I can't comment on the specifics of Ireland and whether it makes sense to use a Ltd or an umbrella.

Director's Umbrella.

[jamesbrown]

The Irish Revenue will have place of supply rules for VAT, but I'm pretty sure it will be outside of the scope of VAT, as it would be in the UK (unless you're delivering something covered by a specific rule, which I doubt).

In terms of US tax, YourCo will be invoicing for (and receiving) non-US-source income (the work is performed in Ireland) as a non-US-person (YourCo is not incorporated in the US), so there's no US withholding. They may ask you to complete a W8-BEN-E on behalf of YourCo. This is their responsibility (to ask and report upwards, if required), not yours.

The above assumes an Irish Ltd and that you're not a US citizen. I can't comment on the specifics of Ireland and whether it makes sense to use a Ltd or an umbrella.

[BR14]

The OP's Irish Ltd should invoice the client in the agreed currency and then pay the OP salary in Euro deducting Irish income tax, PRSI and aUSC.

Sounds right, but US companies sometimes have difficulty understanding these things.
(like, there ARE other countries, with laws)

[siddhantkumar]

The OP's Irish Ltd should invoice the client in the agreed currency and then pay the OP salary in Euro deducting Irish income tax, PRSI and aUSC.

Does it mean, dividend etc will be taxable as well? (i.e. at higher rate of 40%!)

Also, travelling back to London every friday over weekend won't be tax deductible?

[Old Greg]

Where will the US co pay you? gross of local tax and social insurance, and in what currency?

The OP's Irish Ltd should invoice the client in the agreed currency and then pay the OP salary in Euro deducting Irish income tax, PRSI and aUSC.

[siddhantkumar]

Hi. I'm a UK Citizen

US firm will pay in GBP to my UK account

The rates are per day basis. I have to arrange my travel and accommodations. (the rates reflects the expenses)

If I open umbrella company in Ireland, how's tax structure will work? Is there any tax calculator or link where I can get this information? If it's too much hassle, I will stay in my permanent job and not accept this contract.