Mr. Aidan O'Kane:

It is my pleasure to present to the committee today. As Mr. Clancy said, being in the Border region presents nuances and challenges, as well as great opportunities. I am a director of one of the largest foreign direct investment, FDI, enterprises that came into Northern Ireland as a result of the Good Friday Agreement. Allstate in Northern Ireland employs 2,400 people, of whom 900 are in the Derry and Strabane area of the north west. More than a decade ago, Allstate realised that there was a challenge in implementing some of our HR policies on remote working. This was due to tax legislation governing the Revenue in the Republic of Ireland. It prohibited any work carried out for a foreign employer being done in the State. All those duties had to be undertaken within Northern Ireland.

This was an issue that many members of our chamber faced and dealt with over the last decade, after it became apparent that this situation was an issue and whenever employees had greater expectations about remote working and work-life balance. This issue really came to the fore, though, when the pandemic started. In March 2020, a group of individuals dotted around several companies in the north west decided that it was a prime time to try to tackle this issue once and for all in respect of allowing our employees to work from home. When directives from the British Government and the Northern Ireland Executive asked everybody to work from home, if they could, we were left with a dilemma concerning some of our employees. Thankfully, a waiver was in place during 2020 for employees and employers. The waiver for employers ran out at the end of 2020, while that for employees has continued to operate throughout this year. We were facing an issue coming near the end of this year, because that waiver could have run out.

I would like to go over some of the Cross-Border Workers Coalition's engagements on this issue. We met with the Minister for Finance, Deputy Paschal Donohoe, on three occasions this year, in June, September and October. The June meeting was concerned with laying out an awareness of the foundations of this issue and the impact it was having on employers and employees in the north-west region, and right across the Border necklace. The issue was presented to the Minister and his team, and there was a clear recognition of its importance and the impact of the situation on people and businesses. The Minister committed to having the tax strategy group, TSG, produce a paper on this issue. We met with the Minister after that was produced. We had drafted our own respectful rebuttal of the contents of the TSG's findings, two of which were of chief concern to the Minister. In conjunction with tax experts from Grant Thornton and following engagement with Rose Tierney, we produced a rebuttal of both of those aspects.

One point concerned equity in respect of residents in the Republic of Ireland potentially being encompassed within two different tax systems, if they were to work from home full time. The other point involved competitiveness, and whether a change in the relevant legislation would leave employers and businesses in the State at a competitive disadvantage. In our rebuttal paper that we submitted and presented to the Minister and his team in October, ahead of the budget, we respectfully challenged some of the findings and contents of the TSG's paper as being one-dimensional. For example, regarding the equity, and the potential for residents in the State to be in two tax systems, we produced figures that showed those being employed by businesses in Northern Ireland would be no better off. Those with incomes up to £60,000 would experience no benefit at all. On competitiveness, after again having consulted with Grant Thornton, there is much more data to be considered and more work to be done before arriving at a conclusion that any competitive disadvantage would result for businesses domiciled in this State.

To make change in this regard possible, and as easy as possible, we recognise that we must bring in some controls in respect of any legislative changes on remote working. For that reason, we brought some pragmatic suggestions to the Minister and his team. Those were intended to ensure that there would be exposure for the Revenue in respect of the introduction of changes in the legislation governing this area. Some of these controls include limiting the number of days during which employees can work from home for companies based in Northern Ireland. We recognise the international standard of 183 days per year as a maximum. We sought a measure within those limits, which would not set a global precedent. The other control we suggested was having salary caps. Employees who could avail of working from home would need to be under a specific salary threshold. Again, this is a control that we suggested to limit the potential exposure of the Revenue in respect of any changes in the tax system. The third control we suggested was to have specific roles categorised as being able to avail of remote working. That provision would mean we would not be opening this possibility of working from home to those proprietary directors or senior executives who make corporate and strategic decisions from the State, thus inducing a corporate tax presence. Therefore, we have presented pragmatic controls in this regard to the Minister for Finance and his team for consideration.

In the context of all those controls, we have also suggested that any changes could be made and rolled out as a scheme that is time-boxed and trialled to ensure that the concerns highlighted by the tax strategy group could be monitored, controlled and, if need be, revised or, in a worst-case scenario, retracted.

There are ways of changing the rules to allow and not disadvantage those who work for Northern Ireland-based companies.

Within the last couple of weeks we have heard of a further extension into 2022. We have asked for clarification on the associated timescales. At the moment it seems a little open-ended, so a bit more certainty around that is required.

I will finish by giving practical examples of what is happening at present. Employees or prospective employees of businesses like Allstate, Seagate and many other companies around the Border regions are now asking what are the remote working opportunities. To be perfectly honest, we must be straight down the middle and say that while the waiver is in place that is permitted but if there is no certainty going forward then we must be clear that it is quite possible that they will have to be office-based permanently in the absence of something more certain going forward. We are now also seeing businesses north of the Border put out job postings and advertisements for roles, and highly-paid roles in some cases, that state remote working is available to UK residents only. This brings a huge concern in terms of the free movement of people, skills and talent across the Border region, which is absolutely essential to feed businesses in Derry, for example. If that trajectory goes forward with prospective employees making a decision to work for companies that are based in the Republic of Ireland, and Northern Ireland-based companies making decisions to employ Northern Ireland-based employees, then suddenly we are on a path where there is going to be a people border in terms of the economy around the Border regions.