Brain Gain, but Personal Tax Pain for homecoming remote workers

In just over a year, remote working has transformed from a novelty to a mainstay of our working lives. In May 2020, Twitter became one of the first global companies to allow employees to work from home “forever”. Since then, business giants like Facebook and Spotify, and several large companies across the UK and Ireland, have followed suit, offering “work-from-anywhere” jobs for the foreseeable future.

In the past, an easy commute was a major influence in choosing where we located, with concerns regarding job opportunities leading many to emigrate to large English cities like London and Manchester. The growth of remote work has transformed this and has sparked an important question: “Where would you live if you could work wherever you’d like?”.

The USwitch Remote Working Index 2020, which ranked cities and towns across the UK in areas such as green space availability, air pollution and download speeds, Derry City and Strabane came 4th, with Belfast 22nd. In stark contrast, London was 88th, with Manchester last place. New, flexible working practises could see the ‘brain drain’ we have seen in recent years become a ‘brain gain’, as we welcome back our highly skilled graduates seeking the high-quality of life the North has to offer.

This ‘brain gain’ has the potential to revolutionize our local economies, especially in borderland areas like Donegal, and could bring significant financial benefits for our border businesses and communities. However, as these homecoming remote workers will find out, without urgent legislative change from the Irish Government, restrictive personal tax rules could leave this potential untapped.

For cross border workers who live in the Republic but work for a UK-based company, Irish tax laws mean that if you work-from-home at all, you can face a ‘double tax’ on your income. These rules, while suspended for the pandemic, can deny remote working opportunities to thousands of frontier workers, and would hinder any attempt to bring GB-based employees back our border regions. In short, they simply do not work.

To turn our ‘brain drain’ into a ‘brain gain’, urgent action is needed. In the Shared Island Initiative and other cross-border bodies, despite many discussions on the need to strengthen our border economies, little consideration has been given to these harmful personal tax rules. Left unchanged, they not only threaten to stifle any movement of skilled graduates back to our thriving border communities but could lead to businesses and their employees pack their bags.

Now is the time for the Irish Government to act, to rid of these personal tax rules, and end the personal tax pain facing homecoming remote workers. The opportunity to work for high-profile, UK-based companies while looking out on Donegal’s beautiful scenery will be an attractive prospect for many, one which we should not deny due to an outdated tax stipulation.

The North has never had a problem producing bright, talented, and highly skilled young professionals, the problem has been keeping them. Let’s start solving it.

By Aidan O’Kane, Co-Chair of the Cross Border Workers Coalition.