The Universal Social Charge is a tax payable on gross income from most sources, including notional pay, after any relief for certain capital allowances, but before pension contributions. InJanuary 2011 it replaced the abolished Income and Health Levies.
The rates of Universal Social Charge vary, for a list of current rates and exemptions please visit Revenue – Universal Social Charge (USC)
Cross border issues
Living South, Working North
The USC is not charged (on Northern income)
Cross-border workers living in the South are obliged to file a tax return with Revenue each year declaring their Northern Ireland income, fortunately Transborder Workers Relief will ensure they have no tax to pay in the South, provided their only income is sourced in Northern Ireland. Where Transborder Relief applies, the Universal Social Charge is not charged on their foreign (Northern Ireland) employment income.
(Source: Revenue – Universal Social Charge FAQs (PDF, 280KB, see FAQ 3.9)
Living North, Working South
USC will qualifiy as tax paid, but the 4% cap no longer applies
Cross-border workers living in the North are obliged to file a self assessment tax return with HMRC each year declaring their southern income, fortunately due to the Double Taxation Agreement they will be eligible for credit/tax relief (based on Irish tax already paid). For this purpose the Universal Social Charge will be treated as tax paid i.e. relief is available for Irish tax and USC suffered. (This will help reduce the amount of UK tax that may be due.)
During 2011 the Irish Revenue capped the USC at 4% for cross-border workers holding a NI Medical Card, however, following an investigation of the relevant EU legislation and discussions with the HSE, this cap is no longer in place (and should not have been applied in the first instance).
As of 1st January 2012 cross-border workers living in Northern Ireland, as holders of Northern Ireland Medical cards, will no longer have their rate of Universal Social Charge capped at 4%, instead, if their income is high enough, they will be charge the full rate of 7% in line with southern residents
Cross border workers currently (in 2012) trying to claim refunds for overpayments made in 2011 are extremely unlikely to receive a refund. It seems those lucky enough to have been charged the lower rate during 2011 will not be billed for the outstanding 3%, however, claims for refunds submitted in 2012 will have the new ruling applied.
For futher information please see Irish Revenue eBrief No.81/11- Cross-border workers and universal social charge
- Revenue – Universal Social Charge FAQs (PDF, 280KB)
- Citizens Information – Universal Social Charge (USC)
- Citizens Information – Know Your Rights
Page last checked: July 2016
This webpage is for general information purposes only and while we endeavour to keep it up-to-date, errors may occur. It is very important that you check with the relevant body to ensure the information is current and is applicable to your situation: – North / South
If you would like to suggest amendments or highlight new information that could be useful to others please don’t hesitate to get in touch.