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While the Common Travel Area between Ireland and the UK has been preserved post-Brexit, businesses still need to be compliant when it comes to work and travel permission requirements for employees, says Doone O'Doherty. Now that the UK has officially left the EU, many employers have started to see travel and work restrictions apply to certain employees who, before Brexit, could have travelled and worked freely within the EU. Employers need to ensure compliance for their employees and indeed for their own organisations. Ireland is in a somewhat unique position insofar as the free movement of UK and Irish nationals between both countries has been retained under the Common Travel Area agreement. There may be an assumption that Brexit really has no immediate impact on the people agenda for Irish employers and, for many organisations, this is the case. For others, however, particularly those with UK or EU national employees, Brexit throws up a completely new conundrum, with concerns over immigration and global mobility becoming something that employers may need to navigate, often for the first time.  Work permission required   The bottom line is that, since 1 January, freedom of movement of UK and EU nationals between the UK and the rest of the EU has ended. If you have either UK national employees who need to travel to another EU member state, or EU national employees who need to travel to the UK, these individuals are now subject to potential work permission requirements. There may also be restrictions and time limits on the activities they can carry out as business travellers. Where once a UK national could simply move to another EU member state at short notice, and vice versa, attention and planning now need to be given to such travel arrangements. Not only does consideration need to be given to any new movement of people, EU nationals already resident in the UK will have needed to secure their right to live in the UK under the EU Settlement Scheme. Similarly, UK nationals resident in the EU will need to secure their status and regularise their position under the specific rules for that country. Thorough review needed  Businesses need to undertake a thorough review of their workforce and identify any frequent business travellers or those who are likely to be affected by immigration restrictions. This includes building potential immigration requirements and robust pre-travel processes into their Global Mobility Policies. Communicating with employees is also important to make them aware of any new pre-travel requirements or steps to secure settlement that they may need to undertake. Consider the potential cost impact of obtaining necessary immigration clearance. There are two aspects to consider: social security and the application of Irish PAYE rules to short-term business travellers. Social security  The Social Welfare Order 2020 came into effect on 1 January 2021. Its purpose is to ensure that the social security rights and entitlements of Irish and UK citizens under the Common Travel Area arrangements are maintained post-Brexit and that social security need only be paid in one jurisdiction. One key aspect is that it applies to Irish or UK citizens only, who may work in either one or both territories. Thankfully, supplementary provisions were included in a new protocol to the Trade and Cooperation Agreement on Social Security Coordination to ensure that EU or UK citizens who move between Member States will continue to be liable to pay social security contributions in one State at a time. Special provision is made for ‘commuters’, which provides that such individuals may be retained within their home country social security system. This is particularly welcome in the case of EU citizens living in the UK who commute or are posted to Ireland to work and who would not have been able to avail of the Social Security provisions above. Employers need to understand where their people work, their citizenship status and how to make the appropriate applications under the revised rules to the relevant social security authority. Irish PAYE and short-term business travellers  There is no change to the underlying tax rules in Ireland because of Brexit. However, there is likely to be increased short-term business travel between Ireland and the UK, largely due to our geographic proximity and the fact Ireland is the only English-speaking member of the EU.   One myth that often exists is the belief that, provided an individual spends less than 183 days in Ireland, there are no tax implications for their UK employer. This is far from the truth – Ireland has a comprehensive set of rules applicable to short-term business travellers/visitors (STBV) that can easily give rise to an obligation to operate Irish PAYE based on an individuals’ Irish workdays. Equally, it is possible to avail of some concessions in respect of STBVs whereby Irish PAYE does not need to be applied, but only if the appropriate due diligence is undertaken.  UK employers need to understand the travel patterns of their staff, the nature of the duties they are undertaking and the intended duration of those activities. Advice should be sought regarding the potential Irish PAYE (payroll withholding obligations) and whether there is a way to mitigate that obligation. Furthermore, the employer should implement a robust system of tracking an employee’s Irish workdays in order to mitigate any potential breaches. Doone O'Doherty is a Partner in People & Organisation at PwC.

Feb 26, 2021
Press release

Setting of regional corporation tax rate by the NI Executive could put Northern Ireland in unique position to attract foreign direct investment Extension of stamp duty land tax a welcome practical measure Wednesday 3 March 2021 - The decision of the Chancellor of the Exchequer to increase corporation tax from its current rate of 19 percent to 25 percent in 2023 is disappointing for many companies impacted by the pandemic and the effects of the UK’s exit from the EU, according to Chartered Accountants Ireland, commenting in the wake of today’s Budget speech.    Companies were expecting corporation tax to be reduced to 17 percent in April 2020.  Today’s increase to 25 percent by April 2023 will mean large companies will be paying 6 percent more in tax in the space of a few years while smaller companies will not see the promised rate reduction of 17 percent materialise.    The Institute noted that the Northern Ireland Executive should  now consider leveraging its devolved power to set its own regional corporation tax rate, which was originally planned to be 12.5 percent. The Northern Ireland corporation tax rate legislation is now almost six years old but was put on the back burner whilst the region worked to get public finances on a sustainable footing.  Commenting Norah Collender, Professional Tax Leader with Chartered Accountants Ireland said “A lower rate of corporation tax in the region coupled with the dual benefit of having access to both the UK and the EU’s single market for goods could put Northern Ireland in a unique position to attract foreign direct investment into the region, particularly in the manufacturing and distribution sectors.”  Stamp duty land tax The Budget Day extension of the stamp duty land tax zero per cent rate on residential properties in Northern Ireland costing less than £500,000 to the end of June is a welcome practical measure. This will help clear the backlog of property conveyances currently in the pipeline which have been delayed due to the current lockdown. It also puts at least an extra £1,500 in the pocket of anyone buying a house costing £200,000 when they buy this by 30 June. 5 percent VAT for the hospitality sector There can be no doubting the severe impact the pandemic has had on the once thriving hospitality sector in NI. The sector really only benefited from the reduced 5 percent VAT rate for a very short period of time from July until early October 2020. Since then, a series of lockdowns and closures affecting the sector and full lockdown from Christmas has rendered the reduced rate to be of little benefit. The announcement that the 5 percent VAT rate for the hospitality sector will continue until 30 September 2021 means that businesses like restaurants, café and hotels will have a tangible means of enticing reluctant customers back through their doors as life begins to return to normal over the next few months. Taking a typical hotel room costing £150 per night, the reduced VAT rate saves £22.50 per night, meaning the hotel guest has an extra £22.50 to spend during their visit. Today's Budget gives many businesses the financial support and certainty needed as the Government begins to lift public health restrictions. The continuation of the coronavirus job retention scheme to September will give businesses a fighting chance of a viable comeback and will ultimately help protect jobs. Commenting on the coronavirus job retention scheme, Maeve Hunt, Chair of Chartered Accountants Ulster Society said “The job retention scheme has been a lifeline for many Northern Ireland businesses over the last year with almost 110,000 jobs in Northern Ireland currently protected by the scheme. Extending the scheme until 30 September 2021 and keeping the scheme flexible is vitally important and gives employers and employees certainty over the coming months as businesses begin the tentative steps of reopening and bringing employees back into the workplace.” ENDS

Mar 03, 2021
Student Profile

What do you think about Brexit? How do you think the pandemic will affect your career? What do you think is the future of the profession? In every issue of The Bottom Line, we will ask students their thoughts on a particular topic. I anticipate the effects of the pandemic will change the way we work. Hailing from outside of Dublin, I’d like to think it is more feasible to live outside the capital and pursue a ‘hybrid’ work style with a mix of office and remote work. I don’t expect the demand for Chartered Accountants will dissipate and, as such, I can see a healthy increase in competition for roles both locally and further afield. I’m confident there are positives to be taken from the pandemic, and many of us who have successfully migrated to remote work are a testament to that. Kevin Lord, Audit Associate at EY The crisis has transformed the way in which we work and how we work.  Pre-COVID-19, the accountancy profession was in a transitional phase as it embraced new technologies. The pandemic has accelerated these changes. Interpreting  data and analysing data differently will allow accountants to foster a more proactive relationship with clients.  Almost a year on, it looks like hybrid work is likely to persist. I believe hybrid work models, if sufficiently managed, offer the best of both worlds. I enjoy the social and collaborative aspects of office interaction, and the better work-life balance that hybrid work brings. For me, it’s simple things like getting to football training on a Thursday night or walking the dog before work.  However, it may not all be positive. Remote work does create new challenges for both the employee and the organisation. In the long-term, some organisations may look at relocating operations or hiring remote talent to avail of cheaper labour.   Sean Brew, Audit & Advisory trainee at Baker Tilly Due to the uncertainty caused by the pandemic, many of us are wondering what job opportunities will await us in the future. The pandemic has impacted how the sector works forever. For those of us who have worked through this change, and gained most of our accountancy experience working from home, we are part of a group who have had to innovate how we complete our work, and discipline ourselves to meet deadlines from home. I remain optimistic about my future career, accountancy firms have continued to hire during this uncertainty, and we are gaining new skills by working through these challenging times. Sinead Henry, Trainee Accountant at Northern Ireland Audit Office  

Mar 01, 2021