Working in Zurich for 6 months- Whats the tax situation with regards to UK?

[YHB]

Hi,

Im working in Switzerland for 6 months June- November, working via the Swiss agency so paying all taxes here.

Not returning to the UK more than one or two 2-3 day weekend trips so can I just check the salary after tax is exempt from any further tax in the uk?

[ASB]

Hi,

Im working in Switzerland for 6 months June- November, working via the Swiss agency so paying all taxes here.

Not returning to the UK more than one or two 2-3 day weekend trips so can I just check the salary after tax is exempt from any further tax in the uk?

From your description you will certainly be tax resident in the UK (and presumably Switzerland).

Assuming you are UK domiciled then you will need to pay tax in the UK on your worldwide income subject to any DTA's. The general result of this is that you will pay the higher of the UK or Swiss rates (in the UK). Switzerland may also have an interest in your UK income. You may be able to elect to pay NI in the UK under the reciprocal agreement.

http://www.hmrc.gov.uk/manuals/dtmanual/DT18101+.htm

[YHB]

sounds complicated!! had a look at the link and would have been better if HMRC used my tax money to create a single readable document rather than a few disparate sentences

1) Bearing in mind i'm a relatively small fish; how likely is it that I will get a letter etc about this ie I could be abroad backpacking etc for all they know
2) Can you advise of any specialist companies who I can go to sort this out

[ASB]

sounds complicated!! had a look at the link and would have been better if HMRC used my tax money to create a single readable document rather than a few disparate sentences

1) Bearing in mind i'm a relatively small fish; how likely is it that I will get a letter etc about this ie I could be abroad backpacking etc for all they know
2) Can you advise of any specialist companies who I can go to sort this out

You can sort it all out yourself by ensuring you request and fill in a tax return listing the foreign income. There may well be no additional liability. The chance of you getting picked out is comparatively small. HMRC do initial enquiries on about 1% of returns annually - but do have system in place to target quite effectively.

[BTW: I've spent a lot of time in various places. I have always simply invoiced through my UK Ltd. The only place I have had any real bother is Portugal and that was only after they changed the rules locally on withholding taxes. It is likely that I have been "illegal" in most of the non UK places I have worked]

[tim123]

sounds complicated!! had a look at the link and would have been better if HMRC used my tax money to create a single readable document rather than a few disparate sentences

1) Bearing in mind i'm a relatively small fish; how likely is it that I will get a letter etc about this ie I could be abroad backpacking etc for all they know
2) Can you advise of any specialist companies who I can go to sort this out

1) The standard SA rules apply. You have a small chance of being caught but if you are, the penalties are high and can include jail time.

2) If you really are sure that you are only going for 6 months, it is best to find a way of avoing Swiss tax and being payrolled in the UK.

tim

[ASB]

1) The standard SA rules apply. You have a small chance of being caught but if you are, the penalties are high and can include jail time.

2) If you really are sure that you are only going for 6 months, it is best to find a way of avoing Swiss tax and being payrolled in the UK.

tim

Tim,

Is swiss TAX (as opposed to social security) actually higher that ours overall ? If not then the net effect is surely nil since it will simply be relieved against the UK-Switzerland DTA. [Ok, it's a bit of hassle but probably less than trying to arrange so it can be evaded]

[NotAllThere]

Swiss tax and 'NI' is lower than in the UK. If you work through a payroll company, you should be aware that:

• You can claim far more as expenses than in the UK -get receipts for all that you spend. This should be refunded by the payroll company, and deduction made from the gross, as with UK umbrella companies.
• The obligatory pension deduction will be refunded (it used to be in cash, but I think now it may have to go into a pension fund), when you leave the country.
• There is an 18000 CHF tax deduction per year (probably pro-rata), if you are maintaining a home in the UK, while living in Switzerland.
• Tax will be deducted at source, and you won't get the benefit of the above, and other possible deductions, unless you demand a tax return from the Swiss authorities. Get a good Zürich based accountant.