Reply to: IT contractor working abroad in Sweden , subsistence allowence and taxation?

[cojak]

I think we’ve given OP enough info to make up his mind. The rest is up to him.

Thread closed.

[Fred Bloggs]

This is how it works, usually. If you physically perform income generating work in a country, you are liable for tax on that income in that country. Tax residency, and it's possible to be tax resident in more than one country, means liability for worldwide income in those countries.

You don't get to choose. It's up to the tax authorities of the countries involved.

Oh, and giving your sibling a salary? Nope, that doesn't work. The only reason it works for spouses is due to a specific exception encoded in law (and even then, HMRC tried to say it wasn't).

It's no good knocking when there's nobody home. The agency recommends it as a way to pay less tax, don't you know......... What could possibly go wrong then?

[NotAllThere]

This is how it works, usually. If you physically perform income generating work in a country, you are liable for tax on that income in that country. Tax residency, and it's possible to be tax resident in more than one country, means liability for worldwide income in those countries.

You don't get to choose. It's up to the tax authorities of the countries involved.

Oh, and giving your sibling a salary? Nope, that doesn't work. The only reason it works for spouses is due to a specific exception encoded in law (and even then, HMRC tried to say it wasn't).

[eek]

Yes I have a personal number, did my university here and did few months consultant job here and paid taxes to Skatteverket.
What if I do not transfer any money to my Swedish bank account and use my UK bank account for daily expenses etc.
P.S. my contract lasts for a year for now....

probably won’t work but hey I’m no longer concerned protecting people from their own stupidity

[GGWP]

If you are getting paid somewhere around €1000 per day equivalent, and are tax resident in Sweden, you can expect to pay over 50% tax to the Skatteverket on a long contract. You will really need to find a local accountant in Sweden to help you maximise the taxable deductions, because you will need these savings when going to a bar to buy a €10 beer to drown your tax sorrows. I would suggest at least in this scenario, minimising Swedish social security by submitting an S1 application in the UK to HMRC.

If you are resident in Sweden, you will have a personnummer, and are already on the tax authorities radar. The people I know who worked through their UK limited company (not recommended) typically had no footprint in Sweden.

That being said, if you have a high attitude to risk, and don't mind the possibility of the Skatteverket doing a workplace employment audit that flags up your name, and then retrospectively many years later chasing you for back taxes and penalties, then go ahead and work through your UK limited company. I imagine the possibility of this is small, especially if you have Swedish permanent residence and don't get a stamp in your passport every time you enter/ exit Sweden.

Best option is to keep work in Sweden to a minimum, paying yourself through your UK limited company.

Next option is to suck up the tax in Sweden.

Another option is to cut and run: work 3 months through your UK limited company, and then resign. In this instance, due to the relatively short time involved, I would think it very unlikely you would be investigated retrospectively, but I appreciate this is not really the answer you are looking for.

Yes I have a personal number, did my university here and did few months consultant job here and paid taxes to Skatteverket.
What if I do not transfer any money to my Swedish bank account and use my UK bank account for daily expenses etc.
P.S. my contract lasts for a year for now....

[Fred Bloggs]

The recruiter in the UK suggested me to work via UK limited company to save on taxes....

Which explains perfectly the content of your first post.

[GGWP]

if you live in Sweden you're going to struggle to claim rent as expenses from the UK tax man.
And you ask about rent but have hotels in the table. What is it?
Or are you living in the UK and traveling for work?
If it was me I'd try to keep my time in Sweden down to just important meetings, and do most of work from home in the UK.
But you then claim to be Swedish resident....

This just sounds like a complex way to avoid being taxed for a job in Sweden when you live in Sweden. If that is the case then why involve the UK at all? There are better countries in the EU to run a LTD company from.

The recruiter in the UK suggested me to work via UK limited company to save on taxes as the company in Sweden agreed to pay me in UK or Sweden.

[lecyclist]

If you are getting paid somewhere around €1000 per day equivalent, and are tax resident in Sweden, you can expect to pay over 50% tax to the Skatteverket on a long contract. You will really need to find a local accountant in Sweden to help you maximise the taxable deductions, because you will need these savings when going to a bar to buy a €10 beer to drown your tax sorrows. I would suggest at least in this scenario, minimising Swedish social security by submitting an S1 application in the UK to HMRC.

If you are resident in Sweden, you will have a personnummer, and are already on the tax authorities radar. The people I know who worked through their UK limited company (not recommended) typically had no footprint in Sweden.

That being said, if you have a high attitude to risk, and don't mind the possibility of the Skatteverket doing a workplace employment audit that flags up your name, and then retrospectively many years later chasing you for back taxes and penalties, then go ahead and work through your UK limited company. I imagine the possibility of this is small, especially if you have Swedish permanent residence and don't get a stamp in your passport every time you enter/ exit Sweden.

Best option is to keep work in Sweden to a minimum, paying yourself through your UK limited company.

Next option is to suck up the tax in Sweden.

Another option is to cut and run: work 3 months through your UK limited company, and then resign. In this instance, due to the relatively short time involved, I would think it very unlikely you would be investigated retrospectively, but I appreciate this is not really the answer you are looking for.

[Lance]

if you live in Sweden you're going to struggle to claim rent as expenses from the UK tax man.
And you ask about rent but have hotels in the table. What is it?
Or are you living in the UK and traveling for work?
If it was me I'd try to keep my time in Sweden down to just important meetings, and do most of work from home in the UK.
But you then claim to be Swedish resident....

This just sounds like a complex way to avoid being taxed for a job in Sweden when you live in Sweden. If that is the case then why involve the UK at all? There are better countries in the EU to run a LTD company from.

[cojak]

What happens if I take all my dividends and salary in the UK, will I be still taxed in Sweden?

You’ll be taxed in Sweden from day 1, you won’t have to pay tax in the UK.

You’ll need to speak to an accountant who understands this stuff, not internet strangers.

[GGWP]

Have you checked if you’re liable for tax in Sweden? My bet is that you will be.

(Tax is usually demanded where the work occurs.)

This is old and you need to read about visas somewhere else, but it’s a place to start your research:

https://www.contractoruk.com/contrac...money_tax.html

What happens if I take all my dividends and salary in the UK, will I be still taxed in Sweden?

[Fred Bloggs]

What they said. I do not believe you can work in Sweden without paying tax in Sweden. The UK Ltd Co could be regarded by Swedish tax office as being domiciled in Sweden too. This story has all the hallmarks of a train wreck at the moment.

As eek said, the first post is so ignorant of the reality of cross border working, it's difficult to know where to start with this.

[GGWP]

Also, has the agency arranged your visa to work in Sweden?

More information can be found here: https://www.gov.uk/guidance/travel-to-sweden-for-work

Hi thanks for your reply, I do not visa I have resident status in Sweden and I am British national.

[eek]

Get some proper advice as you have the UK stuff wrong (you can sanely only split income with a spouse) and that’s before we look at the overseas part of it (which is so complex and you are missing so much that I don’t even know where to begin)

And be prepared to discover you are incredibly poorly pay relative to others in Sweden - it’s not cheap there

[cojak]

Also, has the agency arranged your visa to work in Sweden?

More information can be found here: https://www.gov.uk/guidance/travel-to-sweden-for-work