Remote work has become a key consideration for many employers. As a result of the pandemic many employees had to work remotely from home. Now as life gets back to normal, it is necessary for employers to consider “what is the new normal”?

Employers are asking themselves - “do we really need employees back in the workplace on a full time basis?” or “can we instead embrace and indeed encourage a new flexible work arrangement which allows employees to work remotely on a full time or part time basis?” Many employers are seeking to be as flexible as possible in the hope that it will assist them in the war for talent.

Employers need to be aware that employees that work from another tax jurisdiction could trigger foreign obligations for them including tax obligations in the other country. This is the case albeit the employees are working from their home, their family home or indeed a holiday home in the other tax jurisdiction. These foreign obligations include inter-alia corporate tax, payroll taxes, social security and immigration.

In terms of any review of future remote working policies, it is necessary to consider the border issue.

If you are a business based in the Republic of Ireland (ROI) with employee(s) who live in Northern Ireland (NI), and work from home in NI, this may trigger UK obligations for you.

If you are a NI business with employee(s) living in ROI, and work from home in ROI, this may trigger Irish obligations for you.

Pre-Covid

Prior to the restrictions imposed as a result of the Covid 19 pandemic, many employees commuted across the border to work on a daily basis. However given that they worked exclusively in the tax jurisdiction in which they were employed and paid, these arrangements should not have triggered obligations for their employer in the tax jurisdiction in which they lived. The employees would likely have had personal tax obligations in their country of tax residence.

There are tax reliefs such as an ROI relief called Trans border Relief which
would have applied once certain conditions were met.

Covid-19 

As a result of the restrictions and lockdowns imposed as a result of the pandemic many of these employees have worked predominantly or exclusively from their homes since March 2020. This has potentially triggered obligations for the employer in the other tax jurisdiction. 

It is also necessary to consider the reliefs and concessions issued by the Revenue Commissioners and HMRC in relation to the pandemic in determining what, if any, tax and social security obligations exist in relation to these working from home arrangements. 

Future foreign remote work arrangements

It is necessary to consider these NI / ROI commuters in relation to future remote work policies. Concessions granted by the Revenue Commissioners and HMRC have ended or will shortly no longer apply. As a result it’s likely that employers could have dual payroll obligations in relation to these employees and that social security obligations may shift to the country in which they are habitually resident for social security purposes if they continue to work from home even on a part time basis.

An analysis of the tax obligations across the various taxes will be required with particular attention focused on how to ensure that double taxation can be avoided from a payroll perspective. 

How we can support

With tax specialists in ROI and NI, we can assist you to understand what tax obligations you will have in relation to you future remote work policies more broadly, and in particular in relation to your ROI / NI commuters.