FAQs: Taxation
Q1) Most common tax query:
- Q: I live in the North and I have recently started to work in the South. Am I liable to pay tax in both states?
- Q: I live in the South and work in Northern Ireland – do I have to fill out taxation self assessment in ROI?
- Q: Where do I pay income tax if I am a frontier worker living in Northern Ireland and employed in Ireland?
A: As a cross -order worker you must pay income tax in the country where you earn your income, but your ultimate tax responsibility is with the country where you live so you must submit an annual self assessment tax return each year declaring your worldwide income. A Double Taxation Agreement is in place between the UK and Ireland so you will be awarded a credit for any tax paid across the border.
Cross-border workers resident in the South can also avail of Trans-border Workers Relief which will ensure that they do not pay any additional tax in the South, unless they have income earned from other Irish sources e.g. rental or investment income. There is no such relief for cross border workers resident in the North so a top-up UK tax bill may be payable to the HMRC. [Last checked November 2022]
Q2) My partner works as a public servant in Ireland. She lives in Newry. Does she have to summit a NI Tax Return or is she exempt as she is a Civil Servant? Is there any document to confirm this exemption?
A: Cross-border civil servants living in the South and working in the North may request an exemption from Revenue so that they do not need to submit an annual tax return. There is no comparable rule for Civil Servants resident in the North. There have been instances were exemptions have been made, but these are on a case by case basis so you should contact the HMRC to make a case. [Last checked November 2022]
Q3) I work in the South and live in the North – can the Universal Social Charge be included as Tax when completing a Personal Tax Return to the Inland Revenue?
A: Yes. Following correspondence between the International Section of the Revenue Commissioners and HMRC / Inland Revenue they have confirmed that they are treating the Universal Social Charge as a tax for the purposes of Article 2 of the UK/IRL Double Taxation treaty. [Last checked November 2022]
Q4) I came to Newry from Poland last year and got a job in north Dublin. I filled in a HMRC self-assessment tax form and last week I received a letter saying that I owe almost £2000. How is it possible?
A: As a Northern Ireland/UK resident with earnings that arise outside of the UK you are obliged to complete a return of that income to HMRC under self-assessment rules. You should be given a credit or relief in respect of any Irish income tax you paid because of the double taxation agreement between the two jurisdictions. There may be a balance of income tax to pay to HMRC if the UK tax liability on equivalent sterling earnings is greater. You may wish to contact an accountant/tax specialist if you want to query the amount you have been billed. [Last checked November 2022]
Q5) I am a resident in Ireland and working in Northern Ireland. Am I entitled to a tax rebate from the government in Ireland?
A: No. You are not entitled to a tax rebate from the Revenue Commissioners in Ireland to whom you must declare your Northern Ireland income. You can avail of Trans-border Workers Relief (Revenue) which will ensure you do not pay any additional tax, unless you have income earned from other Irish sources. [Last checked November 2022]
Q6) I live in Northern Ireland and work in the Republic of Ireland and I pay tax in both jurisdictions. Is it possible to reclaim my tax from the south and only pay tax in the north or do I have to pay tax to both governments?
A: You cannot generally claim exemption from the payment of Irish income tax if you are a PAYE worker in the Republic simply because you reside in Northern Ireland. As a UK resident with earnings that arise outside of the UK you are obliged to complete a tax return of that income to HMRC in the North under self-assessment rules. You should be given a credit or relief in respect of any Irish income tax you are paying because of the double taxation agreement between the Republic and the UK. There may or may not be a balance of income tax to pay to HMRC. This means that there may be tax payable in the north as well as to Revenue in the south. [Last checked November 2022]
Q7) Can I apply for tax credits in the North even though I work in the south?
A: Cross border claims for UK Tax Credits is very complicated and you should contact the HMRC to confirm your exact circumstances. However, if you are already receiving UK Tax Credits please speak with a citizens advice provider if your circumstances change as it may significantly affect your claim and you could be diverted onto Universal Credit.
*Please note that Tax Credits in the Ireland reduce the amount of tax that you have to pay, it is entirely different from UK Tax Credits which is a payment to top-up a low income! [Last checked October 2021]
