Contracting in Ireland with your UK Limited CompanyPosted Friday, February 1, 2019
By: Jimmy Sheehan, Commercial Director, Contracting PLUS.
The tax and expense rules for Contractors in Ireland and the U.K. can be quite different. The U.K. taxes and legislation are far more attractive for Independent Contractors than those which exist in Ireland.
This is a big factor for UK contractors arriving in Ireland to take up a contract role. You want to know if you can you use your UK Company, the short answer for the majority of people is yes, you can.
There are a couple of criteria which must be met but a quick call with one of our team will clarify whether or not you can compliantly use your UK company while contracting in Ireland.
Why you should use your UK Company
- You’re a self-employed independent professional engaged on a contract on a short-term basis (let’s say 6-12 months for the purposes of this article).
- It is perfectly acceptable to use your existing company and commercially, it does not make sense to open up new companies purely for the purpose of a short-term contract in a foreign country.
- You might only need 40% of what you earn while in Ireland to live here. Using your UK company means the other 60% can be taken as dividends at 20%, rather than the top rate of personal tax in Ireland which is up to 55%.
- You can get an exemption from paying PRSI (the Irish equivalent of National Insurance).
- Your UK Accountant can advise you on expenses incurred while in Ireland which may be tax deductible against your UK profits.
If you do nothing else, do this!
We’ve had to help a few UK contractors out of sticky situations because they hadn’t set themselves up correctly. They either got bad advice, half the right advice, or no advice at all (other than some web based research).
The best thing for you to do is this; Ignore all the dates you’ve been given; 30 days, 60 days, 183 days.
While all of these dates have relevance, some relate to deadlines for the company, and others relate to deadlines for the individual.
Talk to us about your plans and we’ll tell you exactly what you’ll need to do and when.
If however, you’re really looking for one timeline to follow and you’re not going to stop searching the internet until you find an article that gives you the advice you want to hear, then the safest deadline for you is 30 days.
Do not spend more than 30 days in a calendar year working in Ireland without getting the right registrations in place.
The reality is however that very few contracts will be for 30 days or less – and even if your contract only requires you to be in Ireland for a couple of days a week, that’s still only about 4 months of contracting before you breach 30 days. Most contracts of this length invariably get extended – and now you’ve got to backdate everything and that might lead to tax penalties.
So what do we advise?
Be realistic from day one. If you’re likely to be here for 6 months, then let us register everything right from the start. If you’re unsure then pick up the phone – talking costs nothing. If after that you need to ‘be officially declared’, here’s what we’ll do;
- We’ll help you apply for a PPS number if you need one
- We’ll assist you in opening an Irish bank account if you want one
- We’ll advise you on expenses and what amount to take as a salary in Ireland
- We’ll register your company as an Employer in Ireland
- We’ll get you an exemption from paying PRSI
- We’ll get you an exemption from paying any UK income tax on any income on which you’ve already paid Irish income tax.
- We’ll work directly with your UK Accountant (if you don’t have one we’ll step into that role while you’re in Ireland)
- We’ll keep you fully compliant while helping you maximise your retention
- We’ll look after all the admin so you can concentrate on your work and exploring Ireland during your free time
- When the contract finishes, we’ll reverse everything so you’re back to normal and all set for your next contract in the UK
If you want to chat to someone and get more information on using your UK Company for contracting in Ireland, call Jennifer Doyle on (01) 611 0707, or fill in the form below with your query and we will get in touch, please include your phone number if you would like us to call you.
Contracting PLUS – Making Contracting Simple