Working in Switzerland

[Turion]

They would do this on dividends, interest on bank deposits, but not income from employment.

WHS

[BlasterBates]

If one pays 20% tax in switz. then wouldn't hmrc ask for another 20%
since UK tax is 40% ?

They would do this on dividends, interest on bank deposits, but not income from employment.

[expat]

If one pays 20% tax in switz. then wouldn't hmrc ask for another 20%
since UK tax is 40% ?

AIUI that is the default arithmetic of the Tax Treaties. However HMRC may decide that the other country has taxing right and just leave it at that. (I don't know because when I was in Switzerland I wasn't resident in the UK).

[Andy2]

You'll pay Swiss tax on all Swiss earnings. Under the double tax treaty, even if you are still UK tax resident, those wages will not be taxed again in the UK.

If one pays 20% tax in switz. then wouldn't hmrc ask for another 20%
since UK tax is 40% ?

[NotAllThere]

The Baslers agree. The Swiss are a miserable lot.

[Turion]

Also, don't expect to have any fun, humour or enjoyment in Switzerland. Everyone is miserable. There is little communication. They don't talk to or acknowledge foreigners. Anyway, that is my experience of Switzerland (the German bit, anyway which makes up most of the country)

[expat]

I would add that one way to find out some of these things is from the horse's mouth. I asked Hector about this and got the answer about travel not being allowable; then I asked about expenses being paid/reimbursed by the Swiss employer separately from the salary, and HMRC said they wouldn't be interested in that money, only the salary.

[Turion]

You'll pay Swiss tax on all Swiss earnings. Under the double tax treaty, even if you are still UK tax resident, those wages will not be taxed again in the UK. Any other non-Swiss earnings will be taxed at the top rate as you will be over the higher rate limit.

Also note that your hotel and flights will not be tax deductable under the Swiss system.

[BlasterBates]

Am not looking to avoid paying tax altogether. Am just looking at ways of reducing the tax I am liable to pay if I fall foul of any HMRC rules. It's clear now that I have to do a lot more research on this rather than knee-jerk reactions.

We had a big discussion about this.

I've read the Double Taxation agreement and it is clear to me that if you are tax resident in Switzerland and you receive emplyoment income (NOT DIVIDENDS) then it is exempt from UK tax. You will be tax resident in Switzerland as well as in the UK. Now they can use this to adjust your tax rates for other income. I would print off the relevant phrases from the double taxation agreement and ask the Accountant to clarify it.

The best way to confirm this is to actually pay for advice from a reputable UK accountant.

It is possible that the HMRC get this wrong. It is quite common on complicated issues to charge the wrong amount of tax. So a good accountant is unavoidable.

[NotAllThere]

It used to be (+10 years ago) that home to office travel, when your office is in anothe country, was specifically allowed. But not now, I believe.

Anyway, there is a possibility that expenses you incur in CH could be reimbursed by your CH employer (which may act rather like a brolly in the UK), and could therefore be tax free. CH is much more generous about expenses than the UK. Home to office travel is deductable, for example.

I'd consult a knowledgable tax accountant to see the best way to work, and what's allowable.

You don't have to be an employee though, assuming you are an EU citizen. You can set up your own Swiss company. It only requires a starting capital of CHF20'000 + about CHF4'000 legal fees...

[pmeswani]

You would be liable to UK tax if you are tax-resident in the UK. Not just a question of contract < 1 year.

How would being paid by your Ltd Co avoid that?

NB: if you are resident in the UK and working in CH, note that because you are employed in CH, HMRC take that as your place of work, and therefore do not allow travel or accommodation there (except the first trip out and the last trip home).

Am not looking to avoid paying tax altogether. Am just looking at ways of reducing the tax I am liable to pay if I fall foul of any HMRC rules. It's clear now that I have to do a lot more research on this rather than knee-jerk reactions.

[expat]

That's a shame. If I read some of the posts on this forum correctly, I could be hit by HMRC for 40% of whatever I earn in the role if the post is less than a year. Am wondering if there is a way I could get the Swiss company to pay my Ltd Co. and get my Ltd Co to pay me in order to avoid paying the 40% tax. If not, then I would have to bite the bullet and make sure that I put aside 40% for if and / or when HMRC decides to claim the money.

You would be liable to UK tax if you are tax-resident in the UK. Not just a question of contract < 1 year.

How would being paid by your Ltd Co avoid that?

NB: if you are resident in the UK and working in CH, note that because you are employed in CH, HMRC take that as your place of work, and therefore do not allow travel or accommodation there (except the first trip out and the last trip home).

[pmeswani]

One doesn't. One has to be employed by a Swiss company.

That's a shame. If I read some of the posts on this forum correctly, I could be hit by HMRC for 40% of whatever I earn in the role if the post is less than a year. Am wondering if there is a way I could get the Swiss company to pay my Ltd Co. and get my Ltd Co to pay me in order to avoid paying the 40% tax. If not, then I would have to bite the bullet and make sure that I put aside 40% for if and / or when HMRC decides to claim the money.

[expat]

Hi,

I am applying for a role in Switzerland and am wondering if anyone has had any experience of working there? Also, I believe that I can't use my own Ltd company in Switzerland, so am wondering how does one go about using a Ltd company for the purpose of a contract in Switzerland?

One doesn't. One has to be employed by a Swiss company.

[pmeswani]

Hi,

I am applying for a role in Switzerland and am wondering if anyone has had any experience of working there? Also, I believe that I can't use my own Ltd company in Switzerland, so am wondering how does one go about using a Ltd company for the purpose of a contract in Switzerland?