Skills Shortage – Here’s a Solution
13th February 2018
Sinead Doherty, CEO of Fenero which specialises in tax advice for contractors and freelancers, says skills shortages in Ireland and the uncertainty surrounding Brexit negotiations are driving demand for both short and long-term contract roles to be filled from outside the country. As a result, enquiries from UK contractors considering positions in Ireland has tripled between 2016 and 2017. Sinead Doherty said: ‘As Ireland’s unemployment levels continue to drop and foreign direct investment increases, it’s no surprise that UK contractors are keen to take advantage of the resulting boom and skills shortages in the jobs market. However, many contractors based in the UK are either turning down or not being offered positions due to uncertainty about to how to remain tax compliant. Going forward employers need to capitalise on this talent pool if they want to attract highly skilled candidates.’
Confusion surrounding tax status
Confusion surrounding how UK contractors can operate in Ireland compliantly is a key factor as to why many do not take up roles here, especially if they wish to use a UK Limited Company structure. But according to Sinead, ‘using a limited company is not an obstacle for UK Contractors in ensuring full legal and tax compliance. We regularly provide advice to contractors about how to register a UK Limited Company in Ireland and once they have taken the necessary steps, they can get to work quickly and easily. This should come as good news for Irish and international firms operating in Ireland, recruitment agencies and indeed, contractors themselves.
Employers and recruitment agencies are often unaware how to correctly deal with UK contractors and assume they must move into an Irish limited company tax structure in order to be tax compliant. Typically, this is not the route UK contractors wish to take due to the reduced financial benefits available to them. As a result they may opt to not take up suitable roles, meaning Irish businesses are losing out on potential candidates.
Sinead Doherty said, “Not understanding the tax system is leading to missed commercial opportunities for contractors, employers and recruiters. In an increasingly competitive and growing economic environment in Ireland, this can be costly for all parties involved.’
Benefits for UK contractors
Using a UK Limited Company provides UK contractors working in Ireland with numerous benefits. “The primary benefit is the difference it makes to their after tax earnings. There are significant tax benefits for UK Limited Company Contractors compared to setting up under an Irish limited company. Simply put, money talks and both recruiters and employers need to be confident they are attracting the most highly skilled candidates for jobs, including contractors based in the UK’, said Sinead Doherty.
Additionally it is more convenient for many contractors to use their existing UK Limited Company to help keep costs down, as they don’t need to go to the trouble of registering a new company solely to work in Ireland.
As Brexit negotiations continue to create uncertainty and the Irish economy continues to grow, Fenero expects to see a further influx of UK contractors taking advantage of the increasing number of contract roles available in Ireland.
‘With uncertainty still looming around Brexit, combined with Ireland’s booming economy and favourable exchange rates, it’s no surprise that we are experiencing a massive increase in UK contractor enquiries. For UK contractors getting to grip with the tax system is the first step they need to take. With the right advice and guidance this can be a simple process with big financial benefits and I’m confident that the increase in the number of UK professionals coming to work in Ireland will continue to rise well into 2018 and beyond”, said Sinead Doherty.
Founded in 2009, Fenero, is a Dublin-based tax solutions company for contractors and freelancers. For more information on contracting and other personal tax solutions visit here>>