Working Outside the UK

[The Spartan]

Hi Everyone

Thought I would update you I spoke to HMRC and upon returning to the UK I will be liable to pay the extra tax, they will look at my foreign income on my tax return and then calculate the difference for which I will have to cough up the difference.

[The Spartan]

Not necessarily. If you are in Switzerland more than 183 days in a fiscal year then probably your Swiss income would only be taxed in Switzerland, the UK would tax you only on UK sourced income. Something like that is stated in the DTA. You see if you are in Switzerland more than 183 days then you would be considered fully resident in Switzerland, and although you can be resident in two countries the DTA does take into account the fact that you satisfy the residency rules of the other country.

Otherwise you end up in a catch 22 who taxes your dividends from the US first for example? Does Switzerland tax them and UK add a topup tax or is it the other way round? In fact you'll probably find that will be taxed only once, though I can't say for sure on that one.

It isn't simple though, everything has to be done on a case by case basis.

In my understanding as long as the Swiss contract is longer than 183 days the UK will probably exempt you from UK tax.

Hi BB

The contract is from 26/3 - 31/12 though I was in the UK for a few days sorting bits and pieces out from 03/5-13/5, I'll give the inland revenue a ring and see what they say thank you everyone you've been most helpful.

[BlasterBates]

Having said that I think it is excellent advice to ring up HMRC and ask them. If you get a sufficiently senior offiicial that's where you get the best advice. i.e. read up the DTA and then talk it through with someone.

[NotAllThere]

Not necessarily. If you are in Switzerland more than 183 days in a fiscal year then probably your Swiss income would only be taxed in Switzerland, the UK would tax you only on UK sourced income. Something like that is stated in the DTA. You see if you are in Switzerland more than 183 days then you would be considered fully resident in Switzerland, and although you can be resident in two countries the DTA does take into account the fact that you satisfy the residency rules of the other country....

I'd forgotten that scenario, and stand corrected!

[BlasterBates]

You only count as non-resident if you are out of the country for a whole tax year. There is a concession that if you are intending to remain out of the country for a whole tax year, that you can be treated as non-resident from the day of your departure.

For tax purposes, then, you're still resident in the UK.

The total tax you'll pay to HMRC is the amount due under UK law, less amount paid to the Swissies / Zürchers.

Not necessarily. If you are in Switzerland more than 183 days in a fiscal year then probably your Swiss income would only be taxed in Switzerland, the UK would tax you only on UK sourced income. Something like that is stated in the DTA. You see if you are in Switzerland more than 183 days then you would be considered fully resident in Switzerland, and although you can be resident in two countries the DTA does take into account the fact that you satisfy the residency rules of the other country.

Otherwise you end up in a catch 22 who taxes your dividends from the US first for example? Does Switzerland tax them and UK add a topup tax or is it the other way round? In fact you'll probably find that will be taxed only once, though I can't say for sure on that one.

It isn't simple though, everything has to be done on a case by case basis.

In my understanding as long as the Swiss contract is longer than 183 days the UK will probably exempt you from UK tax.

[jezosaurus]

I'm guessing that I'll have to pay the difference between Swiss and UK as Swiss tax is lower but then the cost of living here is significantly higher.

I'd advise against guesswork. You could find that your Swiss income is taxed in Switzerland, and that's it, and your UK income is taxed in the UK, effectively giving you 2 lots of tax allowances, one in Switzerland, one in the UK.

The best source is probably the IR - Ring them up and ask them how they would tax the income. They proved to be a better source than anyone else when I was in a (vaguely) similar situation.

[NotAllThere]

You only count as non-resident if you are out of the country for a whole tax year. There is a concession that if you are intending to remain out of the country for a whole tax year, that you can be treated as non-resident from the day of your departure.

For tax purposes, then, you're still resident in the UK.

The total tax you'll pay to HMRC is the amount due under UK law, less amount paid to the Swissies / Zürchers.

[BigTime]

I'm guessing that I'll have to pay the difference between Swiss and UK as Swiss tax is lower but then the cost of living here is significantly higher.

Work out what the additional tax liability in the UK will be and if sufficient use it for 3 months away until the new tax year starts.

[The Spartan]

I believe we have a dual taxation treaty with Switzerland which are designed to make sure that you don't have to pay tax on the same income twice so I think it will be a case of some form filling when you get back to the UK to declare the income and prove tax already paid

I'm guessing that I'll have to pay the difference between Swiss and UK as Swiss tax is lower but then the cost of living here is significantly higher.

[LisaContractorUmbrella]

I believe we have a dual taxation treaty with Switzerland which are designed to make sure that you don't have to pay tax on the same income twice so I think it will be a case of some form filling when you get back to the UK to declare the income and prove tax already paid

[The Spartan]

You could still be deemed resident even if you're here for less than 183 days, if you've spent more than 91 days a year here every year during the last 4. It can be quite hard to lose your tax residency unless you're going away for a whole tax year.

When did you leave the UK?

From HMRC:

You'll be treated as non-resident from the day after you leave the UK if you can show:
you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years

HM Revenue & Customs: Income Tax when leaving the UK

I left on the 24/03 and was back briefly from 03/05-14/05 I then flew back out to Zurich and will be here till 20/12

[Clare@InTouch]

Hi everyone

You probably heard this one before but here goes again and before anyone says use the search facility I have and there wasn't a conclusive answer.

I'm currently working in Zurich and will be till the end of the year, my contract started on 26/03/2012. What I want to know is when I come back will I be liable to pay UK tax given I will have been out of the country for over 183 days which according to HMRC gives me non-resident status.

Still I'm a little worried about it as, it's not exactly cheap here and if I'm going to get spanked for tax when I come back it hardly seems worth it.

My thanks in advance

You could still be deemed resident even if you're here for less than 183 days, if you've spent more than 91 days a year here every year during the last 4. It can be quite hard to lose your tax residency unless you're going away for a whole tax year.

When did you leave the UK?

From HMRC:

You'll be treated as non-resident from the day after you leave the UK if you can show:
you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years

HM Revenue & Customs: Income Tax when leaving the UK

[The Spartan]

Have you paid tax in Zurich?

Hi Lisa

Yes I'm paying taxes in Zurich

[LisaContractorUmbrella]

Hi everyone

You probably heard this one before but here goes again and before anyone says use the search facility I have and there wasn't a conclusive answer.

I'm currently working in Zurich and will be till the end of the year, my contract started on 26/03/2012. What I want to know is when I come back will I be liable to pay UK tax given I will have been out of the country for over 183 days which according to HMRC gives me non-resident status.

Still I'm a little worried about it as, it's not exactly cheap here and if I'm going to get spanked for tax when I come back it hardly seems worth it.

My thanks in advance

Have you paid tax in Zurich?

[The Spartan]

Hi everyone

You probably heard this one before but here goes again and before anyone says use the search facility I have and there wasn't a conclusive answer.

I'm currently working in Zurich and will be till the end of the year, my contract started on 26/03/2012. What I want to know is when I come back will I be liable to pay UK tax given I will have been out of the country for over 183 days which according to HMRC gives me non-resident status.

Still I'm a little worried about it as, it's not exactly cheap here and if I'm going to get spanked for tax when I come back it hardly seems worth it.

My thanks in advance