Welcome to InterTradeIreland's cross-border Q&A section which will deal with different subjects each month.
Our cross-border Q&As are designed to give you the latest information on your most regular tax, payroll and company structure questions. This month we are focusing on the issue of Payroll.
Don't forget, if you would you like to ask us a question on cross-border related issues click the 'Ask us a question' button and we will do our best to help you.
I am a company based in Northern Ireland, how do I register for UK PAYE?
Registering for UK PAYE is completed by contacting HMRC online www.hmrc.gov.uk or by phone on 0845 6070143.
What Details do I need?
The details required in order to register for PAYE are:
- Number of directors, names and addresses and national insurance numbers (if UK resident directors) (applicable for branch & subsidiary);
- Company registration number (applicable for a subsidiary); and
- Incorporation date (applicable for a subsidiary).
What Administrative Requirements Will I Face?
The UK PAYE reference number is normally issued within 5-7 days of the telephone call.
UK PAYE and NIC is paid on a monthly basis. Each month runs from the 6th day of the month and payment must be made by the 19th day of each month. UK PAYE and NIC can be paid quarterly if the total monthly liability would be less than £1,500.
The end of year returns are as follows:
- P35 – this is an end of year form provides HMRC with the total gross pay, tax deducted and national insurance contributions for all employees for the tax year ended on the 5 April . This form must be filed with HMRC online by the 19 May following the end of the tax year.
- P14 – this is an end of year return for each employee showing the total gross pay, tax deducted and national insurance contributions for the tax year 5 April. These forms must be filed with HMRC online by the 19 May following the end of the tax year.
- P60 – this details the employee’s annual gross pay, tax deducted and national insurance contributions. This form must be provided to all employees by the 31 May following the end of the tax year.
- P11D – this from provides HMRC with details of benefits provided to each employee for tax years ended 5 April 2006. This must be filed with HMRC by 6 July following the end of the tax year.
HMRC have introduced on-line end of year filing for PAYE returns www.hmrc.gov.uk/paye/payroll/year-end/annual-return.htm. For companies employing more than 50 employees this is compulsory. For companies with less than 50 employees, this has become compulsory with effect from 6 April 2011.
I am a company based in Ireland, how do I register for Irish PAYE?
Registering for Irish PAYE online www.revenue.ie you need to complete form TR1 or form TR2
What Details Do I need?
Each individual must be registered as an employee of the company, either by providing the company with their P45 from their previous employment or the company can register them using a Form 12A www.revenue.ie/en/tax/it/forms/premreg.pdf
If there are any UK resident employees, they will need to obtain an Irish PPS in order to obtain their Irish tax credits and registration on Irish payroll.
Once registered, each employee will receive their certificate of tax credits with a copy also being sent to the employer. The company is required to deduct the appropriate PAYE, PRSI and the Universal Social Charge from their employee’s gross salary and remit same to the Revenue on a monthly basis.
A Form P30 must be filed on a monthly basis; the return is due on the 14th day of month following the end of the month in question. There are options to file these P30 returns on a quarterly basis where the company has an overall PAYE liability for the year of less than €30,000.
Employing Non-residents: If the company is going to be employing individuals who are resident in Northern Ireland it needs to be aware of the Irish rules in relation the operation of Irish PAYE for non-residents.
Engaging Contractors: In addition to the detailed rules in respect of RCT, the company needs to be conscious of contractors engaged that may in substance be deemed to be employees. The Revenue may challenge a given relationship with a contractor and deem it an employment, making the employer liable for PAYE & PRSI.
Irish Tax Returns as Directors: Albeit UK resident if you are a director of an Irish company you are required to file a Irish tax return on an annual basis, irrespective of whether you draw any salary from the Irish company or not. In this regard the Irish PPS numbers need to be obtained to register you both for Income Tax with the Revenue Commissioners in Ireland.
Directors Salaries: Where a director draws a salary from an Irish company in respect of their duties carried out in Ireland, the company must operate Irish Payroll and return the tax to Revenue on the monthly P30 returns. You will be allocated the basic personal tax credits in Ireland and taxed accordingly, as UK residents, the Irish employment income will also be taxed on your annual UK tax return, however to ensure you are not double-taxed, you are entitled to tax a deduction in your UK tax return for the Irish PAYE and Income Levies deducted for the same period.
InterTradeIreland are confident that the information and opinions contained in this Q&A section have been compiled or arrived at by the authors from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made to their accuracy completeness or correctness. All opinions and estimates contained in this Q&A section constitute the authors judgment as of the date (31st December 2010) that the Q&A’s were compiled and are subject to change without notice. This section is intended to provide general information to its readers. It is not intended to provide a comprehensive statement of the subject matter and does not necessarily reflect the views of InterTradeIreland. While care has been taken in the production of the Q&A’s, no responsibility is accepted by InterTradeIreland for any errors or omissions herein.”
