Are bankers better off in Ireland?

Businesses and non doms are heading for Ireland to escape increasingly punitive taxes in the UK. But will the average banker really be any better off in Ireland?

At first sight, the answer is no. While the UK government has just raised the personal income tax allowance to 6,035, Ireland's tax system offers no tax allowance and works instead on the basis of 'tax credits' once the tax on total income has been calculated.

In the UK, for example, someone earning 75k can expect to earn 49.8k after tax.

In Ireland, the same person earning €94k can expect to earn €60.84, or 48.3k. This is based on the current Irish tax rate of 20% for everything up to €34k and 41% on the balance, minus individual tax credits of €1,760 on the amount of tax to be paid.

The upside is that on a personal tax level, Jim Ryan, a partner at Ernst & Young and deputy and president of the Irish Taxation Institute, says UK citizens working in Ireland no longer have to pay tax on foreign (including UK) income that is not remitted to Ireland.

However, Ryan says that once relative tax and living costs in the UK and Ireland are taken into account, "There is little in it."

Gary Palmer, chief executive of the Irish Funds Industry Association, says the Irish fund admin industry will need to attract more talent from overseas "to address the growing resources issue".

Human resources consultancy Mercer says Dublin ranked 16th in the world for its cost of living. That makes it expensive, but cheaper than London.