Adjusting the Profits for Tax There is a certain deal of freedom within accounting rules. There may be elements of subjectivity in the way certain transactions and positions are shown in financial accounts. For policy reasons, certain types of deductions are not available or are limited or treated differently in the tax computation, in order […]
Expenses incurred by an employee are deductible from tax if they are wholly, exclusively, and necessarily incurred in the performance of employment. This test is quite strict and limiting. Further categories of expenses are deductible. Contributions to an occupational pension scheme, if deducted by the employer, are up to limits and subject to conditions. Subscription […]
Benefits in Kind In addition to salary earnings, the value of benefits in kind received by employees e.g. a company car is subject to income tax. There are certain exemptions for employees earning less than a certain amount. Where employers reimburse expenses, the employer must report these on form P11D (as in Ireland). A claim […]
Every person in the United Kingdom has a national insurance number consisting of two letters, six digits, and another letter. National insurance does not apply to a person’s earnings if they earn below the national lower earnings limit, which has varied from year to year. Primary Class 1 contributions are applied by employees and are […]
Income Taxes If an individual or company is resident in Ireland but undertakes a farming trade or business in the United Kingdom, there will be UK and Irish Taxation consequences. Generally, credit will be given for tax paid in the country where the activity is undertaken against tax payable in the country of residence. A […]
General Rule For all tax purposes, the United Kingdom includes the six counties of Northern Ireland as well as Scotland, England and Wales. An individual or company which is neither resident nor ordinarily resident in the UK will generally be liable to UK income tax on UK source income only. This would include UK rents, […]
Branch or Subsidiary There is generally no UK tax on profits earned in the UK by an Irish resident individual or company, unless they are earned by a UK branch or UK resident subsidiary. Therefore it is possible to do a very considerable degree of business in UK without coming within the remit of UK […]
Overview There is legislation in the UK, of which there is no equivalent in Ireland, designed to prevent UK companies diverting profits out of the UK to countries charging low rates of Corporation Tax. These companies are called “controlled foreign companies”. A “controlled foreign company” is one resident outside the UK and controlled by persons […]
This note looks at overseas tax issues from the UK perspective. This position is broadly similar to the equivalent Irish position. A company resident in the UK is subject to Corporation Tax on its worldwide income. An overseas branch is an extension of the UK business. A branch is the company’s presence in another jurisdiction. […]
Trading from Ireland Provided an individual trader or the partners of a partnership are resident in Ireland and not resident or ordinarily resident in the UK, then no UK Income Tax can arise on the business profits, unless there is a branch or permanent establishment in the UK through which the business is carried […]