Thousands of southern workers to give up NI jobs in tax pinch

End of temporary tax relief rules impeding 'working from home' option for southern Irish workers with cross-border jobs

Aidan O’Kane, co-chair of the Cross Border Workers Coalition (CBWC) and a director of tech firm Allstate Northern Ireland.

Irish tax relief rules need to be urgently revised to ensure cross-border workers can avail of the same remote working flexibility as their single jurisdiction co-workers, says the Cross Border Workers Coalition.

The CBWC says that hundreds, if not thousands, of southern-domiciled workers are currently in two minds about continuing to work in the North. Northern employers talking to the CBWC are reporting a steady stream of southern workers leaving to take up roles in the Republic.

Under the current Trans-Border Workers Relief legislation, cross-border workers, who live in the Republic of Ireland but work in Northern Ireland, can be denied tax relief if they work from home. Many are deciding to change jobs, returning South rather than live with the uncertainty.

The CBWC has urged the Irish Government to consider the unique tax circumstances of ROI cross-border workers when introducing new remote work legislation. The Coalition is an alliance of individual employees who live in the Republic of Ireland, but work in Northern Ireland.

The group wants An Tánaiste Leo Varadkar, who has recently published the Right to Request Remote Work Bill 2021, to consider how outdated tax rules can restrict home-working practises for cross-border employees.

“Every day, the Coalition is hearing of people making that decision,” said Aidan O’Kane, co-chair of the CBWC and a director of Allstate, the North’s largest tech firm with around 2,300 employees. “People are giving up careers they’ve spent years developing.

“Back in November, our company interviewed one woman from Letterkenny, but she still feels she can’t make the choice to work for us with this uncertainty over tax. I’m regularly being asked by people on LinkedIn for clarity. There are thousands of people impacted by this situation.”

 Irish Revenue figures show around 1,000 or so people submitting self-assessments within this context. The CBWC, however, cites a Queens University Belfast study estimating that up to 25,000 people commute cross-border daily for work.

“Numbers are hard to be sure of, but even if it were half the number in the Queens study, there would be 12,500 people commuting for work,” said Aidan O’Kane. “Our own company employs around 900 people in Derry and Strabane impacted by this. We are having to tell people that if they are living south of the border, they cannot work from home.

“We have met Finance Minister Paschal Donohoe. We understand that the tax issue is not about financial losses to Revenue, who don’t get a lot of money from this. The concerns are around business competitiveness, about giving businesses in the North a competitive advantage.

“However, the CBI and Ibec are both aligned with us in asking for this tax change, so that argument on competitiveness is not a legitimate concern.” 

 The rules around cross-border tax reliefs were temporarily waived in March 2020, when health authorities advised people to work from home due to minimise the spread of Covid-19. The relaxation of rules was due to run out in October 2021, but then the Omicron virus led to an extension.

“Now we are in No Man’s Land again, that’s why employers in the North are telling staff from the South that they have to come into the office,” he said. “Workers in that category are very definitely disadvantaged.” 

 The CBWC fears that cross-border employees are set to effectively lose all remote working flexibility. This contrasts with employees across the Republic of Ireland, who are set to be granted a formal right to request home-working, inapplicable for thousands of employees in the border region.

Aidan O’Kane says that, as the Right to Request Remote Work Bill 2021 goes through Dáil Éireann, amendments should be brought forward in recognition of the challenges facing border workers.

“Any strengthening of the right to remote work for employees is to be welcomed,” he said. “The Right to Request Remote Work Bill, while not perfect, provides a solid legislative basis that can be strengthened as it makes its way through Dáil Éireann.

“While the Bill provides support for ROI employees working in the state, it does not consider the unique tax liabilities of cross-border workers who, due to outdated tax rules, may not be able to avail of this right to remote work. Amendments to the Bill must be considered to reflect the reality facing thousands of ROI cross-border workers.

“Remote work is here to stay, but for many cross-border workers, home-working flexibility is not. Left unchanged, employers across this island may be forced to exclude border employees simply as a result of where they live.

“This simply does not work for the employees we represent. We now call on the Irish Government, including An Tánaiste, Leo Varadkar, TD, and Minister for Finance, Paschal Donohoe, TD, to work together and address outdated cross-border tax rules once-and-for-all.”