Business clinic: Cross border questions
This month sees ASM Chartered Accountants continue a seminar series aimed at providing SMEs interested in growing their cross border trade with practical financial advice.
The eight-seminar series, known as the Cross Border Bureau, is being delivered in partnership with InterTradeIreland and has travelled across the North and South of Ireland over the past weeks.
The next free seminar will be this Thursday in Dungannon on 22nd October at Quinns Corner and in Derry/Londonderry on the 5th November at Da Vinci’s Hotel, at which delegates will be addressed by keynote speakers from ASM and InterTradeIreland.
This month’s Business Clinic focuses on Cross Border questions arising from the seminars.
My business has developed to the point whereby I am starting to sell to more customers from the Republic of Ireland. Do I need to be registered for VAT?
All goods you sell remain VATable, the question is in which country and at what rate. If you supplying goods to a business customer based in Ireland, provided they are VAT registered and can provide you with certain documentation you will not have to charge them VAT. They will account for the VAT themselves in Ireland. If it is a personal customer who you are supplying from Northern Ireland you will continue to charge UK VAT. The situation would be different if you were supplying services within Ireland or if you were to open your own premises in Ireland.
If I wanted to employ a salesperson to be based in Ireland but my business remains based in N Ireland what would my obligations be?
If a salesperson is a UK resident but carries out all of their duties in Ireland, as an employer you will be required to register and operate ROI payroll. They will therefore have Irish TAX, PRSI and USC deducted from their salary. The employee will be assessed for UK tax purposes on this income but will receive relief for the taxes already paid in Ireland.
I see great potential for my business – can I get advantage of the lower tax rates in Ireland for all my sales to Ireland?
If your business is simply supplying goods from your NI base to customers in ROI you will continue to be taxed at UK rates on all your profits. If your business expands to open new premises in Ireland you may have created a branch of your UK business and as such will have to pay corporation tax in Ireland on an element of your profits. These profits will be taxed again in the UK but with relief for the Irish tax already paid. In these circumstances it may be more beneficial to establish a new Irish Company and provided certain conditions are met such as the day to day control and management of the company being carried on within Ireland, you may be able to only pay 12 1Ž2 % Irish tax on these profits.
Cross border taxes can be a complicated area and these answers are only intended to provide a brief overview of the situation. Professional advice should always be sought before proceeding.
ASM have organised a series of seminars in conjunction with Inter Trade Ireland to assist businesses in taking the first steps in cross border trading. Full details including dates and venues can be found at www.asmaccountants.com
To speak Alistair Cooke, Director, ASM Chartered Accountants, Dungannon, email or call or visit www.asmaccountants.com for further details.
Visit www.asmaccountants.com for a full list of services.