Written evidence submitted by Cross Border Workers Coalition, relating to the Investment in Northern Ireland inquiry (INI0022)

The case for legislative change on remote working tax rules for Cross Border Workers resident in the Republic of Ireland working in Northern Ireland

Issue Background

• The Cross Border Workers Coalition is an alliance of individual employees who live in the Republic of Ireland but work in Northern Ireland.
• Under current legislation, cross-border workers, who live in the Republic of Ireland but work in Northern Ireland, can face a ‘double tax’, from both HMRC and Irish Revenue, if they work-from-home.
• This requirement, specified under the terms of ROI’s Trans Border Workers Relief, can disrupt the lives of thousands of everyday cross-border workers, particularly those in the often-under-invested border regions.

Impact on employees

• In the UK, an NI resident employee who works for an ROI-based company can work-from-home for up to 60 days without incurring an additional tax liability. In ROI, however, an ROI resident employee working for an NI-based company faces a ‘double tax’ if they perform any work-related activities remotely.
• To qualify for Trans Border Workers Relief, all duties of employment must be exercised “wholly outside the State”. For thousands of employees, this means that all work must be performed in Northern Ireland, with no flexibility to even take a phone call or send an email from home.
• The Irish Government has temporarily waived this requirement since March 2020. This is set to end this year with no alternative support in place, with workers fearful of a return to pre-pandemic inflexibility.

Impact on NI employers, wider economy, and investment

• This issue is majorly concerning for several NI employers and left unchanged, could deter FDI into the region and/or see companies leave NI. The rigidness of the tax rules curtails wealth creation, jobs, and social mobility.
• Companies may have to restrict their hiring capabilities to one side of the border as they are unable to offer ROI-based employees modern working practises. Job advertisements have already begun to say, “Remote Work (For UK Residents Only)”, with tax rules significantly restricting the talent pool available.
• Greater fluidity in where workers carry out their employment activity will increase productivity, promote economic development in disadvantaged border areas, and attract more companies to set up in Northern Ireland.

Our Ask

• The Coalition have raised this issue with representatives from across the Oireachtas, Stormont, and Westminster, presenting our pragmatic reforms to current problems.
• An exploration of the income tax relationship between the UK and Ireland is required to address this issue. Current rules fail to reflect the modern, hybrid working practises now operated across these islands.
• The Coalition ask that Westminster works alongside the Irish Government to consider the potential avenues for legislative change that can benefit businesses and employees in Northern Ireland.

January 2022