UK subsidiaries for Irish companies

Ireland is the fifth largest source of investment projects into the UK, at 45 a year. Irish and UK company law share ancestry. The differences that matter are in corporation tax, audit and identity verification.

Where the two diverge

• Corporation tax. The UK main rate is 25%, not 12.5%. A model built on Irish rates is out by roughly half, and the small profits rate is unavailable to most groups because the thresholds are divided by the number of associated companies worldwide.
• Audit. The UK exemption depends on the size of the whole group, and an Irish parent that is itself audited will usually make the UK subsidiary audited too.
• Identity verification. Companies House verifies every director and controller. Ireland's regime is different and does not carry across.
• Goods to Northern Ireland follow different rules from goods to Great Britain. Buzz has a Northern Ireland office and this is ordinary daily work for us rather than a special case.

Money and people

Dividends to the Irish parent leave the UK without withholding tax. Interest and royalties are subject to 20% UK tax at source unless the treaty reduces it and the claim has been made. Social security for posted workers is covered by the UK–EU protocol, and there is a separate long-standing arrangement between the UK and Ireland covering the common travel area.

Three things we set up differently for an Irish parent

1. The corporation tax expectation. This is the big one. A group modelling UK profitability on 12.5% will be out by roughly half. The UK main rate is 25%, and the 19% small profits rate is largely unavailable because both thresholds are divided by the number of companies under common control worldwide. We build the first-year forecast at 25% and treat anything better as good news.
2. Audit. The UK exemption depends on the size of the whole group. An Irish parent that is itself audited will usually make the UK subsidiary audited too, and the auditor must be appointed before the year end.
3. Identity verification. Companies House now verifies every director and person with significant control before appointment. Ireland's regime is different and does not carry across, so Irish directors go through GOV.UK One Login like anyone else. It is the step most likely to delay an incorporation.

Where the two diverge

Irish and UK company law share ancestry, and diverge on corporation tax, audit and identity verification. Most of the structure does. The differences are concentrated in tax rates, audit thresholds, the identity regime and the fact that goods to Northern Ireland follow different rules from goods to Great Britain. Buzz has a Northern Ireland office, so that last point is routine work here rather than a special case.

Money and people

Dividends to the Irish parent leave the UK with no withholding tax. Interest and royalties carry 20% at source unless the treaty reduces it and the claim has been made to HMRC in advance. Social security for staff moving between the two is covered by the UK–EU protocol, alongside the long-standing common travel area arrangements, so a posted employee can normally stay in the Irish system with a certificate.