Does Double taxation take you into the next tax bracket?

**BlasterBates** · 26 February 2013, 13:43

If your main tax residence is in the UK then yes it does.

I would strongly advise you enquire with in an accountant as to whether you pay additional tax in the UK. People on this forum are not tax experts and don´t necessarily trust opinions which are not paid for, just from the tops of their heads on the phone. I would pay for an accountant to clarify this specific point. It really will be worth your while. Cross border tax is complicated and if you know now you can potentially save a lot of money by adjusting your contract i.e. extending it by a month or two, or not returning home or simply knowing what proof the authoriities require about where your main residency is.

Try and collect proof of where you are and how long you spend in the UK and Switzerland. Whereever your main tax residence is will reduce your tax burden in the other country. It doesn´t matter whethere that is Switzerland or the UK, the other country will require proof that you are mainly tax resident elsewhere, and the 183 day rule is only one factor, it isn´t even the main factor once you are to-ong and fro-ing. The main factor is where your family is, if you´re single then it´s complicated.

If you just leave it to the tax authirities they will both assume you are mainly tax resident in their country, and you will generally pay more tax. Obviously the UK authorities will credit Swiss tax paid, but for example if you have income from bank accounts, or dividends this maybe taxed twice.

So make sure you know which your main tax residency is and collect proof to claim tax back from the other country, or at least let then know when you hand in your tax return.

**Ignis Fatuus** · 26 February 2013, 14:32

Originally posted by Mehmeh View Post

Hi everybody!!!

About to do some work in Switzerland,

Lets say I'm currently just under the 40% tax bracket in the uk for the tax year.. If I earn (and pay tax) in another country, and double taxation is used so I don't need to pay any extra tax in the UK (just to keep it simple).

Will that effect my tax rate or allowances in the UK at all?

Thanks just trying to get my head around all this new stuff.

Short answer: yes.

That is why they do it the way they do: your Swiss income is also taxable (theoretically) in the UK, but then the UK gives you a credit against UK tax = the tax that you actually paid in Switzerland.

Result: for the UK, you are in a tax band that fits your total earnings, nit just your UK earnings.

**The Spartan** · 26 February 2013, 15:29

Originally posted by Ignis Fatuus View Post

the UK gives you a credit against UK tax = the tax that you actually paid in Switzerland.

Which will mean that you'll pay a lot more tax in the UK, seeing as the tax rates are relatively low in Switzerland compared to the UK. Take note anything you incur terms of social security etc in Switzerland does not count as tax. HMRC will just take the tax % you pay and apply that when calculating how much extra you have to pay to bring up it to UK tax levels.

**Ignis Fatuus** · 26 February 2013, 15:48

Good point about compulsory deductions that are not "tax", you don't get a credit for them.

Also, DYOR before making any assumptions about what you might claim as expenses. Remember that in Switzerland you will have to be an employee. Therefore when HMRC calculate your UK tax liability, they will not let you claim travelling or subsistence, because an employee can't claim for travel from home to place of work.

**Mehmeh** · 26 February 2013, 16:04

Brilliant, thanks very much everyone! That really cleared it up in my head!!

Have an amazing day!

Does Double taxation take you into the next tax bracket?