Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 6:

In page 11, after line 34, to insert the following: “Report on operation of income tax relief for cross-border workers

11.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the operation of income tax relief for cross-border workers under section 825A of the Taxes Consolidation Act 1997, including the consideration of options to regularise the temporary relief granted by Revenue under section 825A in response to Covid-19 and further measures to facilitate cross-border workers in the future.”.

This amendment concerns a discussion I had with the Minister on Committee Stage regarding cross-Border workers. I asked the Minister to look at this issue through the prism of Brexit and the Good Friday Agreement, GFA. As the Minister will be aware, there is a relief in our tax code called the trans-border relief. People can claim this if they are working wholly outside the State, that is, the jurisdiction, and commuting to work. Mostly, that will involve people working across the Border. In other cases, however, people resident here could perhaps be flying to Manchester or London and be working five days a week in Britain, or elsewhere.

The problem in this area has again been exposed by the pandemic and, in fairness, the Revenue and the Department were quick to act on it. If people carry out any work, which is more than incidental work, in this jurisdiction, then they will lose this trans-border relief. If, for example, people work from home for one day, or half a day, they would lose this relief. That would be the case as long as it was something deemed more than incidental. As a result of the pandemic, the Revenue waived that requirement because we are obviously trying to encourage people not to travel. That is not the issue.

The issue concerns changing work patterns, and we just had a conversation about working from home. If an employee living in Donegal, for example, and working in a company in Derry is availing of this relief, that will mean that the tax which that person pays is calculated in Derry and there is no tax liability in this State. If that person works one day from home, however, that will all be gone. He or she will have a tax liability here then, and the difference between what would be applicable in Derry and this State would have to be paid to the Revenue here. If we look at the reverse case, where an employee was resident in Derry and working in a company in Letterkenny, that employee could work from home up to something like 60 days and still be able to gain the relief. I am not suggesting that this should be right across the board. There is, however, a need to carve out space within our Finance Bill regarding these cross-Border workers on the island of Ireland. I mention looking at this issue through the prism of Brexit, but also in respect of the Good Friday Agreement.

I do not believe we should allow those who live on one side of the Border and work on the other to work remotely most of the year. Let us, however, try to bring the situation into line with what happens in the North. Let us allow for several days where people can work from home. That could be for different reasons. It could be a case where two partners are working. One could be a nurse, a teacher or working on the front line. Perhaps a child is sick on a given day, and that worker who was supposed to travel to Derry cannot do so and works from home instead. If that person works from home on any substantive issue, anything more than something incidental, he or she stands to lose this trans-border relief. That is why there should be flexibility built into this scheme to ensure it is possible for people to work in their place of residence for several days and still be able to avail of the relief.

An energetic group has been established in respect of cross-Border workers. The group has been seeking a meeting with the Minister and I encourage him to have that meeting. The Minister spoke about looking at this issue, which I know from the discussion we had on Committee Stage in respect of the finance papers in July. However, this issue needs more urgency and a commitment that this issue will be carved out and looked more speedily is needed, and that is why I have tabled this amendment.

It is an important issue and affects many people. I am not stipulating what the number of days should be. The Minister can decide that. It could start with 12 or 14 days, whatever number of days he chooses. There must be some flexibility, however. It is far too rigid now. The criteria states that the employment duties must be "wholly exercised outside the State", with none performed in the State, save for duties considered incidental to the foreign employment. That is a situation of a bygone day. Therefore, while we have double taxation arrangements, where there is offsetting of tax from one jurisdiction to the other, trans-border relief is a different matter. We must build into our tax code for workers resident here, but working outside the jurisdiction in the North, the flexibility to not lose this trans-border relief completely if they work from home on a certain number of days in the calendar.

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