Tax on Foreign Income

christyxo2

Hi all,

I am a UK resident living 100% of the time in the UK but I have just started employment as a remote worker for a company in the Republic of Ireland. I understand that I will be taxed by Ireland on my salary, and that I have to pay tax on foreign income to HMRC.

What I can't understand is what exactly I pay tax on. Do I need to pay tax on my whole salary, or can I claim tax only on the money that comes into the UK. As a basic example, assume that I get €2,000 paid into an Irish bank account per month and I exchange and transfer £1,500 of this into my UK bank account.

Do I pay tax on foreign income on the full €2,000 despite roughly 25% not coming into the country, or am I only required to pay tax on foreign income on the £1,500 that comes into the country.

00ec25

the straightforward position is:
you pay UK tax on your gross worldwide income . That means earnings, not the cash you move around the globe.
But, from that UK tax liability you deduct any tax you have already paid on the Irish income. So the net effect is you only pay tax once, but you pay it at which ever country has the highest tax rate

this is called "double taxation relief" and is enshrined in "tax treaties" of which the Irish one is here:
https://www.gov.uk/government/publications/ireland-tax-treaties

so , as the Irish tax bands are expressed in Euros, and Euro is still (just) weak than GBP, more of your income will be paid at the Irish 40% rate than would be paid at the UK tax rate. Overall therefore you probably will not have to pay any tax to HMRC as it will be offset in full be the tax already taken under Irish PAYE

read the treaty so you understand

now the much less straightforward position is
why are you being taxed in Ireland anyway? If you work in the UK there is a possibility you should be paying UK PAYE and claiming that against an Irish liability.

How sure are you that your employer is competent?