Cross border working and paying tax

[Ulick]

Can anyone give me some advice on this. I'm getting an increasing amount of freelance work from Dublin while living in Belfast. Currently I'm sending invoices to pay cash into the wife's old southern account (in her maiden name). This is grand up to a point but now the work has become regular what are the risks and implications? I also have a fulltime job in the north where I pay tax and national insurance.

[Shamrock Shore]

Ulick

visit www.revenue.ie and search for transborder relief.

If I were you I'd simply declare the income with UK HMRC and keep away from the whole ROI/NI thing as it will cost you in tax.

[lawnseed]

Ulick

visit www.revenue.ie and search for transborder relief.

If I were you I'd simply declare the income with UK HMRC and keep away from the whole ROI/NI thing as it will cost you in tax.

yes. don't mention anything in the 26, they'll try to hit you for the raft of taxes like community charge and such shite. if your vat reg in norn iron then your work is an export therefore not liable to vat. better to get that account into joint names or you could get your wife into diffs further down the road. shamrock will know more re the tax implications with this account but I think it may now considered as offshore.... cant be too careful

[Shamrock Shore]

Lawnseed.

There is no community charge but if Ulick starts contacting Irish revenue then he would be liable to USC, PRSI etc.

As I said simply declare the ROI earning in the UK return as foreign income and it's taxed in the normal way and Bob's your mother's brother

Be careful Ulick if you are invoicing people in ROI who are not registered for ROI VAT. If they are not then you have to charge them UK VAT and return to HM in the normal way.
Keep a record of the VAT numbers of your registered ROI customers and if in doubt there is an online VAT number checker to verify that their ROI VAT number is legit.

[Ulick]

Thanks lads. Main customer is a large established company who are VAT registered. Seeing all that income tax free cash roll into the bank account is tempting I must say. Find myself questioning why I should pay tax on income earned from a different state. Don't suppose you'd know how likely it would be that HMRC would find my southern slush fund and what would the likely penalty be if they did?

[lawnseed]

Lawnseed.

There is no community charge but if Ulick starts contacting Irish revenue then he would be liable to USC, PRSI etc.

As I said simply declare the ROI earning in the UK return as foreign income and it's taxed in the normal way and Bob's your mother's brother

Be careful Ulick if you are invoicing people in ROI who are not registered for ROI VAT. If they are not then you have to charge them UK VAT and return to HM in the normal way.
Keep a record of the VAT numbers of your registered ROI customers and if in doubt there is an online VAT number checker to verify that their ROI VAT number is legit.

social charge is what I was referring to.

also there child tax credit issues if the main earner is working in the south..

better to declare it all in north keep yourself right. I'd be worried about using that account the bank will inform revenue eventually and it will look as if your wife has been working in the black market economy

[Throw ball]

Thanks lads. Main customer is a large established company who are VAT registered. Seeing all that income tax free cash roll into the bank account is tempting I must say. Find myself questioning why I should pay tax on income earned from a different state. Don't suppose you'd know how likely it would be that HMRC would find my southern slush fund and what would the likely penalty be if they did?

As part of EU information is regularly passed between UK and ROI. If the southern account is getting regular amounts lodged into it there is also the possibility that the bank will report it. The penalty can be up to 100% of the tax due. There is also the fact that you will have twenty years after the last transaction to see if revenue are going to take any action. This could be many sleepless nights. I know if it was me I would try and get things sorted now. Speak to your accountant as it should be easy sorted - although paying the tax mightn't!

[Ulick]

20 years! Bloody hell. Thanks lads. I guess I have until April to make up my mind on whether or not to declare.

[Shamrock Shore]

The risk I see it Ulick is that if the Dublin company gets a Revenue audit and your name comes up.

If Irish Revenue are of a mind they can attached the Dublin company with the tax you should have paid if they cannot get you to pony up thereby ruining your business relationship with them.

That to me is a higher risk as there isn't the staff to look at every bank account in the ROI to see what are the lodgements etc.

[Ulick]

If Irish Revenue are of a mind they can attached the Dublin company with the tax you should have paid if they cannot get you to pony up thereby ruining your business relationship with them.

Thanks SS, that was the answer I needed. Much appreciated!

[armaghniac]

The risk I see it Ulick is that if the Dublin company gets a Revenue audit and your name comes up.

The Irish revenue would be interested in who exactly was getting payments, as it could simply be a scam by the company paying its own staff.
The bank is a probably lesser issue, until people start investigating anyway.

[Aristo 60]

You say it's a large established company ? And they are happy to pay you via an account in your wife's maiden name?

Are you saying they have a subcontractor called Mr Joe Bloggs and they are happy to write cheque to Miss Betty Smith?

All sounds a bit lax to me on their part.  I'd love my employer to pay into a Dundalk account on my behalf into another persons name.

I know for a fact that up until last year Northern accountants were going down to Dublin to mark/score students exams for one of the professional accountancy bodies, getting a cheque in Euro and lodging in Irish bank accounts no tax paid. The Accountancy body eventually got their act together and sent the money direct to belfast for all the normal PAYE deductions to occur. Still, it took them a while to get their house in order - and this is the accountants' professional body we are talking about !

Always something to bring up in a horse trade when the Inland Revenue are beating you!

[screenexile]

I've been working on a Southern Payroll for a couple of years now while living in the North. (Fcukin USC on my payslip each month the bastards).

What way does this affect my tax in the North. I've never really bothered about it before but starting to think of pensions and the like and I'd imagine my lack of NI contributions will not help my case!

[Ulick]

You say it's a large established company ? And they are happy to pay you via an account in your wife's maiden name?

Are you saying they have a subcontractor called Mr Joe Bloggs and they are happy to write cheque to Miss Betty Smith?

All sounds a bit lax to me on their part.  I'd love my employer to pay into a Dundalk account on my behalf into another persons name.

I know for a fact that up until last year Northern accountants were going down to Dublin to mark/score students exams for one of the professional accountancy bodies, getting a cheque in Euro and lodging in Irish bank accounts no tax paid. The Accountancy body eventually got their act together and sent the money direct to belfast for all the normal PAYE deductions to occur. Still, it took them a while to get their house in order - and this is the accountants' professional body we are talking about !

Always something to bring up in a horse trade when the Inland Revenue are beating you!

Not quite. Originally the plan was to pay into my BoI account in Dundalk but it turned out to be dormant. I then asked them if it would be okay to pay into the wifes old southern accounts as I'd be liable for fees if it was transferred north. That has just remained as the arrangement. On the invoices my name and address is clearly visible only the bank details are of an account down the country. I get the impression I'm saving them a lot of money so I guess they're not going to ask to many questions.

[Aristo 60]

I still think it's shoddy enough on their part.

As for you "do you trust your wife" (as Shawshank Andy said to the prison guard)