Potential employer based in Southern Ireland - Tax looks very complicated?

tillycat123

My OH has a second interview with a Limited Company based in Southern Ireland. However he would be living here in the UK and working here. He would be the only employee outside of the Euro, others are based in Germany,Switzerland as well as Ireland.

I've been trying to fathom how tax would work on his pay let alone any benefits in kind and to be honest it looks like a real headache to sort out if he got offered the job.

As I seem to understand it he would have to pay tax in Ireland then complete a SA for the UK, it all reads complicated what I have managed to find.

The parent Company is based in the US. Would it be any easier or any advantage to ask if he could be employed and paid by the US parent company or would that be just the same?

Many thanks for any help and guidance

ceeforcat

He would be the only employee outside of the Euro, others are based in Germany,Switzerland as well as Ireland.

Not sure what this means - Germany and Ireland are in the euro. Switherland is not.

As I seem to understand it he would have to pay tax in Ireland then complete a SA for the UK, it all reads complicated what I have managed to find.

Correct - although taxes are generally higher in Ireland and it would be unlikely, after set off, that there would be additional tax although you cannot claim back the difference. Salaries are higher though - some figures would be helpful.

pjclar02

Hello there

If he is living and working in the UK, then I don't see why he should be liable to Irish PAYE and PRSI.

My view on this is that either the Irish company, or the ultimate US parent should register an Establishment in the UK, register this Establishment for PAYE and operate a UK payroll, deducting UK PAYE and NIC.

Do you know how the company operates in Germany and Switzerland - presumably it has registered a place of business in each to operate local taxes?

If the company did this - then it would make life easier for the UK employee.

Hope this is of some help.

tillycat123

Many thanks both for the replies, I think you are right pjclare02 asking them to set up some kind of subsidiary for a single employee maybe the way to go. The post is actually MD of the company in Ireland but he would only be expected to be there 1 day a week, the rest of the time in the UK and travelling in Europe. So I guess does that 1 day a week cause any complications should a subsidiary be set up?

pjclar02

I've come across thi situation many times, working for US companies looking to start-up in Europe. Without the correct advice, in my experience, these companies often don't think about the tax complexitites of hiring an overseas employee.

If he is predominantly based in the UK and will be tax resident here, then it certainly makes sense to have a UK Establishment. This doesn't have to be a full blown subsidiary (i.e. a limited company), but an "Establishment" is essentially a branch or a place of business in the UK (an arm of either the US or Irish entity) - which is sufficient to show HMRC that the company has a presence in the UK, which will enable PAYE registration.

An Establishment may also enable the company to get a UK VAT registration so that any UK VAT he incurs can be recovered.

You never know, it may even help your partner at his second interview if he displays a commercial awareness of these issues to his potential employer!