Working in Northern Ireland and living in the Republic of Ireland

If you work in Northern Ireland and live in the Republic of Ireland, your pay is subject to UK tax rules because the work is done here, and Ireland may also treat you as tax resident because you live there. Two things then decide the detail: where you count as tax resident, and which country’s social security system covers you. The rules are the same for a council worker, a nurse in a health trust and a civil servant, but the answer differs from person to person, so check your own case.

The two questions

Income tax and social security are separate systems, and people often mix them up.

Income tax depends on where you are tax resident and where the income arises. Social security means National Insurance in the UK and PRSI in Ireland. nidirect says that when you work across the border you are subject to only one state’s social security legislation at a time. You pay into one scheme at a time and claim benefits and pensions from whichever state’s legislation you fall under.

Tax residence in the UK

GOV.UK says residence usually depends on the number of days you spend in the UK in the tax year, which runs from 6 April to 5 April. The statutory residence test has automatic UK tests, automatic overseas tests and a sufficient ties test. Spending 183 or more days in the UK in the tax year is one of the automatic UK tests. Another is working full-time in the UK for 365 days.

The same page says non-residents only pay tax on their UK income, while UK residents normally pay UK tax on all income, wherever it comes from. If you live in the Republic and commute daily to a job in Northern Ireland, your Northern Ireland earnings are UK income. Your employer will usually deduct tax through PAYE under a tax code, so tax codes matter here as they do for anyone else, and the UK rates in how income tax works apply to the pay.

The Irish side: Transborder Workers’ Relief

Ireland has a relief for residents who work across the border. Revenue sets these conditions for Transborder Workers’ Relief:

• you are an Irish tax resident
• you work in a country that has a double taxation agreement with Ireland
• you have paid tax in that country, with no refund of it still due to you
• you return to Ireland at least once in each week you work abroad
• you hold the overseas employment for a continuous 13-week period within the year

You cannot claim it if you receive Seafarers’ Allowance, the Foreign Earnings Deduction or split year treatment, or if you, your spouse or your civil partner is a proprietary director of the company you work for abroad. Whether you qualify, and how days worked from home are treated, is for Revenue to say. Check its guidance or ring it before you start, because the conditions cover how often you return to Ireland and how long the job lasts.

Social security and National Insurance

On the UK side, National Insurance contributions build entitlement to benefits and the State Pension. National Insurance explained covers how they are worked out on a UK payslip. The question for a cross-border worker is whether they pay UK National Insurance or Irish PRSI, and nidirect’s answer is only one system at a time. Ask HMRC, the Department of Social Protection or the Cross Border Partnership for Employment Services.

nidirect gives no single contact for cross-border social security questions. It says to contact the department or agency that handles the benefit, for example the Northern Ireland Pension Centre for pensions, or your local Jobs and Benefits office for Jobseeker’s Allowance.

If you start work in Northern Ireland you need a National Insurance number, and getting a National Insurance number explains how.

Benefits if you lose your job

nidirect says you can export contribution-based Jobseeker’s Allowance to the Republic of Ireland for a maximum of three months while you look for work there. Other questions about importing or exporting unemployment benefits go to your local Jobs and Benefits office.

Living in Northern Ireland and working in the Republic

The reverse commute raises the same two questions. If you live in Northern Ireland you are probably UK tax resident, and UK residents normally pay UK tax on all their income, including earnings from abroad. Ireland will also tax pay for work done there, and the UK and Ireland have a double taxation agreement. How the two fit together depends on your days, your employer and your other income, so ask HMRC and Revenue.

Free advice for cross-border workers

The Cross Border Partnership for Employment Services provides information on job vacancies, training, social security entitlement, taxation, comparing qualifications and employment rights. It covers Northern Ireland and six border counties in the Republic: Louth, Cavan, Monaghan, Sligo, Donegal and Leitrim. The guides for Newry and Derry cover local employers on the Northern Ireland side.

For your own case, the people who can answer are HMRC, Revenue, the Department of Social Protection, nidirect and the Cross Border Partnership. A tax adviser can help if you have other income.