Article 2 of 5: How to Tender for Opportunities in Ireland – How to Tender in Ireland: a Guide for UK Firms (Part 1)
Introduction
This is a guide for UK firms wishing to tender for opportunities in the Republic of Ireland. Specifically, this includes the requirements on firms from England, Northern Ireland, Scotland and Wales bidding for public sector contracts in the Republic of Ireland. It is part of our series aimed at driving access to tender opportunities for UK and Ireland firms. A separate guide exists for Irish firms wishing to win work in the UK. Part 1 focuses on the foundation; the prerequisite requirements that would support business to tender in Ireland.
Single EU Market
The Single Market means the EU exists as a single territory without any internal borders or other regulatory obstacles to the free movement of goods and services. What this means for UK firms is that selling into another EU country such as Republic of Ireland can be relatively simple.
Tax Arrangement
An arrangement (convention) has been in place between the UK and Ireland since the 1970s to avoid double taxation. What this means, in practice, is that much work that UK firms can tender for in Ireland, that the work will be taxed just once, by HMRC and not ‘double taxed’ by Irish Revenue. Of course it not always straight forward and you should seek appropriate advice from HMRC and/ or independent advice. However, in principle the arrangement between the UK and Ireland makes doing business relatively simple for many UK firms working in the Republic of Ireland and Irish firms working in the UK.
Application for Tax Clearance Certificate
One difference between doing business in the UK and Republic of Ireland is the need for a Tax Clearance Certificate. Again in simple terms, a Tax Clearance Certificate is required for any work, with the Irish public sector. A Tax Clearance Certificate is issued by the Irish Revenue confirming that a person’s (or firms) tax affairs are in order at the date of issue of the Certificate. They usually expire after 12 months, meaning an annual renewal, However, the process is usually simple via completion of a relevant form. For UK firms this is commonly Form TC1 – see here.
Professional Services Withholding Tax (PSWT)
PSWT can be a surprise for UK firms trading with the Irish public sector. While something of an over simplification, effectively PSWT takes (withholds) tax in advance for a range of services referred to as ‘professional services’ – consultancy, financial services, legal among others. What happens is that a rate of 20% is deducted at source from payments for professional services made to individuals and companies that have delivered work for: Government Departments, local authorities, health boards, state bodies among others. The tax is charged on payments net of value-added tax and applies to both Irish and non-resident firms. Non-resident firms can usually claim a refund if the income is not chargeable to Irish tax. Form F45 is issued with the payment setting out the transaction including the amount being paid and the amount being ‘withheld.’ These F45 forms can be submitted alongside a further form: IC11 for a refund. See here.
How the refund works in practice is usually straight forward, with one challenge. The first time a UK firm applies for a refund, Form IC11 requires a stamped confirmation by the HMRC that the firms tax affairs are in order. When the HMRC Enquiry Centres were available, this was a simple case of making an appointment asking a member of the staff to confirm, sign and stamp the form. This is required for the first refund only. However, with a programme of HMRC Enquiry Centre closure some UK businesses have found it difficult to get HMRC to authorise this form. Hopefully this will improve as HMRC opens a range of Regional Centres. See:
https://www.gov.uk/government/news/hmrc-announces-next-step-in-its-ten-year-modernisation-programme-to-become-a-tax-authority-fit-for-the-future
http://www.bbc.co.uk/news/business-34796299
Next in the Series: Article 3: How to Tender for Opportunities in Ireland – a Guide for UK Firms Part 2. Article 3 focuses on tender opportunities and the benefits to UK firms.
Further Support: including tender templates, tender model answers, guidance and tips on writing powerful tenders have a look at www.winningtendersacademy.com.
Introduction
This is a guide for UK firms wishing to tender for opportunities in the Republic of Ireland. Specifically, this includes the requirements on firms from England, Northern Ireland, Scotland and Wales bidding for public sector contracts in the Republic of Ireland. It is part of our series aimed at driving access to tender opportunities for UK and Ireland firms. A separate guide exists for Irish firms wishing to win work in the UK. Part 1 focuses on the foundation; the prerequisite requirements that would support business to tender in Ireland.
Single EU Market
The Single Market means the EU exists as a single territory without any internal borders or other regulatory obstacles to the free movement of goods and services. What this means for UK firms is that selling into another EU country such as Republic of Ireland can be relatively simple.
Tax Arrangement
An arrangement (convention) has been in place between the UK and Ireland since the 1970s to avoid double taxation. What this means, in practice, is that much work that UK firms can tender for in Ireland, that the work will be taxed just once, by HMRC and not ‘double taxed’ by Irish Revenue. Of course it not always straight forward and you should seek appropriate advice from HMRC and/ or independent advice. However, in principle the arrangement between the UK and Ireland makes doing business relatively simple for many UK firms working in the Republic of Ireland and Irish firms working in the UK.
Application for Tax Clearance Certificate
One difference between doing business in the UK and Republic of Ireland is the need for a Tax Clearance Certificate. Again in simple terms, a Tax Clearance Certificate is required for any work, with the Irish public sector. A Tax Clearance Certificate is issued by the Irish Revenue confirming that a person’s (or firms) tax affairs are in order at the date of issue of the Certificate. They usually expire after 12 months, meaning an annual renewal, However, the process is usually simple via completion of a relevant form. For UK firms this is commonly Form TC1 – see here.
Professional Services Withholding Tax (PSWT)
PSWT can be a surprise for UK firms trading with the Irish public sector. While something of an over simplification, effectively PSWT takes (withholds) tax in advance for a range of services referred to as ‘professional services’ – consultancy, financial services, legal among others. What happens is that a rate of 20% is deducted at source from payments for professional services made to individuals and companies that have delivered work for: Government Departments, local authorities, health boards, state bodies among others. The tax is charged on payments net of value-added tax and applies to both Irish and non-resident firms. Non-resident firms can usually claim a refund if the income is not chargeable to Irish tax. Form F45 is issued with the payment setting out the transaction including the amount being paid and the amount being ‘withheld.’ These F45 forms can be submitted alongside a further form: IC11 for a refund. See here.
How the refund works in practice is usually straight forward, with one challenge. The first time a UK firm applies for a refund, Form IC11 requires a stamped confirmation by the HMRC that the firms tax affairs are in order. When the HMRC Enquiry Centres were available, this was a simple case of making an appointment asking a member of the staff to confirm, sign and stamp the form. This is required for the first refund only. However, with a programme of HMRC Enquiry Centre closure some UK businesses have found it difficult to get HMRC to authorise this form. Hopefully this will improve as HMRC opens a range of Regional Centres. See:
https://www.gov.uk/government/news/hmrc-announces-next-step-in-its-ten-year-modernisation-programme-to-become-a-tax-authority-fit-for-the-future
http://www.bbc.co.uk/news/business-34796299
Next in the Series: Article 3: How to Tender for Opportunities in Ireland – a Guide for UK Firms Part 2. Article 3 focuses on tender opportunities and the benefits to UK firms.
Further Support: including tender templates, tender model answers, guidance and tips on writing powerful tenders have a look at www.winningtendersacademy.com.
