Companies are increasingly wary of hiring cross-Border workers because of tax, pension and payroll issues, report warns
Traffic crossing the Border outside Newry. Around 20,000 people declare they cross the Border daily, or weekly, to work. Photograph: Paul Faith/AFP via Getty Images
This way, Tierney’s staff in Monaghan can work there, or remotely from their homes in the Republic, and their Fermanagh colleagues can do so in Roslea, or from their own homes in Northern Ireland without falling foul of Irish or UK tax rules.Republic’s incoming government should not fear taking a clear stance on unity
Wage rates in the Republic are higher but so, too, are taxes: “The Universal Social Charge pushes the rates up for NI workers who take up a job in the Republic, so they could end up paying thousands extra,” she warns. Rose Tierney of Tierney Tax with her staff, Angela Tierney, Donna Hall and Máiréad Corr at the office in Roslea, Co Fermanagh. Photograph: Alan Betson
“It doesn’t work if you work from home remotely, or if you carry out some duties in your home,” says Tierney. Aidan O'Kane, Derry-based Allstate executive, who has been closely involved in the campaign seeking changes to cross-Border work tax and pension rules. Photograph: Lorcan Doherty Ibec executive director, Fergal O’Brien says the island should be exploiting the fact that it is heading towards having a nearly four million-strong labour pool.
Part of the reason is that operating dual payroll systems as currently required is expensive. That has left companies having to order staff back into the office to comply with tax rules, or, just as importantly for companies in the Republic, for fear of facing a UK corporation tax bill.“ feels highly unfair. My NI colleagues work from home while I am forced to commute to an empty office to work as I would at home over Zoom, Teams etc,” said one Donegal resident working in Derry for three years.
“For workers who live on one side of the Border and work on the other, the complexity of dual payroll and the lack of pension tax relief are difficult and costly for both employers and employees to navigate,” she goes on. Switzerland and France have also reached an agreement, though the rules vary depending on the Swiss canton, while Belgium and France have rules for cross-border workers living with 20km of their border.
Some employers have decided not to hire more cross-Border workers, while some multinationals have warned that the smaller available labour pool is making it more difficult to compete for future investment within their organisations. Sometimes, one professional source told the LEFF report’s authors, “the situations are so complex they did not know what question to ask, let alone the answer they were seeking”. The information failures “can have significant repercussions – involving costs for workers and employers, noncompliance penalties because the rules aren’t understood and/or they become too difficult to comply with”.
Clear guidance is also needed on the Republic’s version of auto-enrolment which comes into operation next year to ensure that Northern-resident workers are not taxed on the employer or State contributions by HMRC. Rose Tierney: 'If you just take up a job across the Border and you make a pension contribution through the employment, you do not get tax relief in your home country on that contribution.' Photograph: Alan Betson
“If you just take up a job across the Border and you make a pension contribution through the employment, you do not get tax relief in your home country on that contribution,” Tierney says.
Northern-Ireland Confederation-Of-British-Industry-Cbi Allstate Ibec Fergal-O-Brien Tax Pension Auto-Enrolment
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