Working in Switzerland, Staying in France, "resident" in the UK, company ?

[GoneRoaming]

Greetings,

I am a UK citizen, currently resident in the UK with no plans to sell my house, soon to be working on a 4 month contract in Switzerland, but living across the border in France.

Questions:

• Am I still a UK resident for tax purposes?
• Do I pay social security payments in France, Switzerland or the UK?
• Can I write off housing and living expenses since I am living abroad
• Am I correct in thinking that even if I pay social security in Switzerland/France I pay NIC in the UK
• Where is the best country to set up my company?

It is all a bit confusing and I am new to contracting so any advice would be most welcome.

Thank you very much,

Danny

[Martin at NixonWilliams]

I am a UK citizen, currently resident in the UK with no plans to sell my house, soon to be working on a 4 month contract in Switzerland, but living across the border in France.

Questions:

• Am I still a UK resident for tax purposes?
• Do I pay social security payments in France, Switzerland or the UK?
• Can I write off housing and living expenses since I am living abroad
• Am I correct in thinking that even if I pay social security in Switzerland/France I pay NIC in the UK
• Where is the best country to set up my company?

Some of these questions are not as straightforward as they may seem! I would recommend that you speak with an accountant, one who regularly deals with foreign tax/social security. Broadly speaking:

- Assuming you live in the UK before and after the contract, you will be UK resident throughout.

- Due to the short term of the contract, you will continue to pay NI in the UK. It is unlikely you will pay social security in France/Switzerland but I am not sure of how their system works.

- If you are renting out the UK property then certain expenses will be deductible against rental income received. Other than that, no unfortunately.

- As above, due to the short term of the contract you will continue to pay NI in the UK.

- It is very difficult to say! If it is just for four months and you plan on coming back to the UK after, having a UK company will probably be easier for you.

I hope this helps.

Martin

[expat]

You will need to be employed by a Swiss company (or another payroll company registered as a Swiss employer) and you will pay Swiss tax. You will also be tax-resident in the UK and so liable for UK tax on your Swiss earnings, but you can offset tax paid in Switzerland against tax due in the UK on the Swiss earnings.

You will pay Swiss national insurance (for Swiss pension) but can reclaim it free of Swiss tax after you leave (at which point it will become UK-taxable income).

As an EU citizen (so far) you can work and live in Switzerland for up to 90 days without a visa: you have to notify the authority but when I did it, I had to notify the Swiss local authority that covered my residential address. You'd need to ask about that if your local address is not in CH. That 90 days would be working days so you might be OK for 4 months: check that too. Not that the visa for EU citizens is a problem.

I'd guess that the French connection is irrelevant here (?)

BTW if you are "employed" in Switzerland, HMRC will not see any travel between the UK and CH as an allowable expense (except 1 flight out at the start and 1 back at the end). OTOH if you can get the Swiss company to pay you expenses separately from salary, that's none of HMRC's business (genuinely, Hector told me that).

All this is informal and based only on my own experience as far as I remember it. Your client/agent/Swiss payroll company may be more familiar with the details. I was told that I couldn't work through my UK Ltd from day 1, but research that.

[stek]

Usually the Swiss agent will insist you go through a local payroll company, unless you want to set up a GmBh which ISTR is very expensive, as is everything in CH. You'll have to pay Swiss Social Security (RAV, etc) - when I was looking there deductions came to about 30% or so.

AIUI that applies even if you live in France, as the Swiss will deem you earn there, you're taxed there.

[BlasterBates]

This is complicated. Unfortunately there are tax implications in all three countries.

Normally you pay tax and social security in Switzerland. If you don't you have to justify to the Swiss authorities why you don't if you are doing all the work in Switzerland.

The next question is where will your main residency be, France or the UK. It does appear that this will be the UK, since you have no French income there is nothing to tax in France. Once you live there for longer than 6 months then they may start asking you to fill out a tax return and justify why you are not tax resident.

Do bear in mind when you are in a country it's your responsibility to justify why you are not tax resident, not them to prove otherwise. They will just come down on you like a ton of bricks when they find out about you. If you want to avoid any trouble you should register both with the Swiss and French authorities and comply with their tax regulations. Staying under the radar will always lead to a nasty investigation if they find out about you.

Just because you've registered doesn't mean you necessarily pay tax it's up to you to provide them the information.

Personally I would just live and work in Switzerland to make it less complicated than it is.

[Magpie252]

As others have said, you will need to apply for a Swiss work permit, and pay Swiss tax, your employer will insist on seeing your ‘Auslanderausweis’ (work permit)

If your contract was for less than 3 months then you can apply on-line, for more than 3 months you have to register with the local authority, provide a copy of your contract & a copy of your apartment lease

For me, it was easier in live in Basel rather than commuting from France/Germany, be aware that rental agencies in France & Germany will charge a rent + administration fee based on the length of the lease (for 4 months expect 90% of 1 months rent), I was able to secure an apartment on a rolling contract, no other fees except a bill for final cleaning.

Try homegate.ch | Immobilien, Wohnung, Wohnungen oder Haus suchen und finden. they have an English version

Expect to lose ~9% to cover Swiss Employer taxes, personal tax is based on your Canton of residence, about 22% total in Basel. You agent should provide you with a personalised pay estimate.

More details of tax rates here: Cantons and towns in comparison

Be aware that Switzerland is extremely expensive, do your research before committing yourself

[GoneRoaming]

Thank you everyone

Thank you everyone...to add some background I would be moving there with my wife and 3 dogs for the duration of the contract - and the missus (who speaks some French and no German) would rather live in France. I am hoping that the cheaper living costs in France will offset the inconvenience and also offer a better opportunity for me to improve my French (though I am aware I can improve my French in Basel too).

I am hopeful that the initial contract will be extended or that I will find another in Basel but who knows?

Best wishes,

Danny

[stek]

What's the rate? Some awful ones in CH lately, you need 850 min really

[NotAllThere]

If you live in France and work in Switzerland, then you are, in the local parlance, a grenzganger with a G permit. There are agreements between France and Switzerland regarding your tax and social payments.

The tax you pay to France/Switzerland will be offset against your UK tax bill.

I saw that you registered on the English Forum. You're best asking these question there as you'll find more people in your situation - but do search first!

[GoneRoaming]

If you live in France and work in Switzerland, then you are, in the local parlance, a grenzganger with a G permit. There are agreements between France and Switzerland regarding your tax and social payments.

The tax you pay to France/Switzerland will be offset against your UK tax bill.

I saw that you registered on the English Forum. You're best asking these question there as you'll find more people in your situation - but do search first!

Hello again , I did search both forums (fora?) but though I found some answers none that really fit that well (so I posted on the English forum but have had no replies as yet). I get the feeling that maybe there are more people in my situation on the English forum but that this one is more active perhaps?

Thank you for your help