Go Back   English Forum Switzerland > Help & tips > Employment
Reply
 
Thread Tools Display Modes
  #1  
Old 29.10.2015, 17:20
Newbie
 
Join Date: Oct 2015
Location: London
Posts: 1
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Boxy has no particular reputation at present
Tax question: UK resident working in Zurich for a year

Hi,

I've been offered a job in Zurich and I'd like to find out a bit more about how I stand with tax.

I'll be employed full time by the company (ie not contracting), however the job is for 1 year only.

Can someone please tell me:

1. Are there tax bands like there are in the UK? - if so, what are they?
2. Other than income tax, what other taxes should I be aware of?
3. I've heard there's a 1500CHF tax-free allowance for living expenses - is this true?
4. Where do I stand on tax back in the UK? National Insurance etc.


Thank you in advance - it's greatly appreciated.
Reply With Quote
  #2  
Old 29.10.2015, 17:30
newtoswitz's Avatar
Forum Veteran
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 1,158
Groaned at 15 Times in 13 Posts
Thanked 1,310 Times in 596 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Simplified responses - this is tax after all, there are much more complex and correct responses as well...

1. Not exactly but it is a sliding scale and there is a basic tax free allowance.

2. Health insurance, pension contributions, various social security contributions, church tax if you desire, wealth tax

3. There are tax allowances for various things; it depends what sort of permit you are on, whether you pay tax at source and/or complete a tax return, if you own a property...

4. You normally pay tax in only one place, except for income from property; you can make up NI and pension payments in the UK if that is worthwhile.

Also see here: Lohncomputer.ch - Net wages calculator
Reply With Quote
  #3  
Old 29.10.2015, 17:41
Forum Veteran
 
Join Date: Dec 2012
Location: Aargau
Posts: 1,559
Groaned at 12 Times in 11 Posts
Thanked 1,810 Times in 881 Posts
Mullhollander has a reputation beyond reputeMullhollander has a reputation beyond reputeMullhollander has a reputation beyond reputeMullhollander has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Ct. Zurich has an information sheet on source tax. Generally, if you earn less than CHF 120'000 p.A. you will be subject to it. If you earn more than CHF 120'000 p.A., it appears that you will be subject to it for the first year at which time you can reclaim any difference between it and what would be owed from ordinary taxation by filing a tax return. It's complicated:

http://www.steueramt.zh.ch/dam/finan...t_qst15_en.pdf
Reply With Quote
  #4  
Old 30.10.2015, 17:15
Junior Member
 
Join Date: Oct 2014
Location: Aargau
Posts: 37
Groaned at 0 Times in 0 Posts
Thanked 24 Times in 14 Posts
The ScottiCH One has earned some respectThe ScottiCH One has earned some respect
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
4. Where do I stand on tax back in the UK? National Insurance etc.
I strongly suggest speaking to a qualified tax advisor in the UK with experience of international (ideally Swiss) tax affairs.

Generally speaking you will need to remain non-resident in the UK for the remainder of this current tax year plus the following one before any foreign income is deemed not to be subject to UK tax. So if you come to CH now, you would need to stay resident here until 5 April 2017. There are however a myriad of ifs and buts that can only be cleared up by a thorough examination of your individual affairs...some useful information is here:

https://www.gov.uk/government/public...dence-test-srt
https://www.gov.uk/tax-right-retire-abroad-return-to-uk
https://www.gov.uk/national-insurance-if-you-go-abroad

If you don't qualify as non-UK-resident throughout the period, you will have to pay UK tax on your worldwide earnings (any Swiss income tax paid will be deducted from this UK tax bill) so it is worthwhile getting specific advice from a qualified advisor.

Good luck
Reply With Quote
  #5  
Old 30.10.2015, 17:20
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,724
Groaned at 209 Times in 181 Posts
Thanked 11,034 Times in 6,259 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
If you don't qualify as non-UK-resident throughout the period, you will have to pay UK tax on your worldwide earnings (any Swiss income tax paid will be deducted from this UK tax bill) so it is worthwhile getting specific advice from a qualified advisor.

Good luck
The OP will almost certainly satisfy the 3rd automatic overseas resident test:-

Third automatic overseas test
1.7 You work full-time overseas over the tax year, without any significant breaks during the tax year from overseas work, and:
 you spend fewer than 91 days in the UK in the tax year
 the number of days in the tax year on which you work for more than 3
hours in the UK is less than 31
Reply With Quote
  #6  
Old 30.10.2015, 18:35
NotAllThere's Avatar
Forum Legend
 
Join Date: Oct 2008
Location: Baselland
Posts: 8,968
Groaned at 140 Times in 122 Posts
Thanked 12,245 Times in 5,008 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
...
4. You normally pay tax in only one place...
Well, you can be tax resident in two places. If there's a dual taxation agreement, then any tax paid in one place is considered a credit toward any tax due in the other.

The tax in the UK is generally higher than in CH, so if the OP remains resident in the UK, he'll have to pay tax not only in CH, but also to the UK. But overall not more than he would if he stayed in the UK at the same income.

Quote:
View Post
The OP will almost certainly satisfy the 3rd automatic overseas resident test:-

Third automatic overseas test
1.7 You work full-time overseas over the tax year, without any significant breaks during the tax year from overseas work, and:
 you spend fewer than 91 days in the UK in the tax year
 the number of days in the tax year on which you work for more than 3
hours in the UK is less than 31
I understood that you have to be away for an entire tax year - April to April - to be none resident.

So if you come here in January, then for the 2015/2016 tax year, you'll be tax resident in both countries. If you then leave January 2016, you'll be again, for 2016/2017 tax year, tax resident in both countries. But if you leave in May 2017, the 2016/2017 will be treated as non resident in the UK.

IIRC you only get non-residency for part years as a concession, if your intent was to leave the country permanently.
__________________
In accordance with Political Correctness guidelines, I've checked my privileges and come to the conclusion that I'm awesome.
Reply With Quote
  #7  
Old 30.10.2015, 18:46
Junior Member
 
Join Date: Oct 2014
Location: Aargau
Posts: 37
Groaned at 0 Times in 0 Posts
Thanked 24 Times in 14 Posts
The ScottiCH One has earned some respectThe ScottiCH One has earned some respect
Re: Tax question: UK resident working in Zurich for a year

Be careful...


Quote:
View Post
I understood that you have to be away for an entire tax year - April to April - to be none resident.
Not necessarily - search for "split year treatment" and read the statutory residence test documentation linked to above for full criteria.


Quote:
View Post
So if you come here in January, then for the 2015/2016 tax year, you'll be tax resident in both countries.
Not necessarily - this depends considerably on OP's personal situation (previous UK residence history, number of UK ties, personal/financial situation, etc, etc) and whether split year treatment applies. Read the SRT documentation thoroughly.


Quote:
View Post
If you then leave January 2016, you'll be again, for 2016/2017 tax year, tax resident in both countries.

But if you leave in May 2017, the 2016/2017 will be treated as non resident in the UK.
Not necessarily true - SRT is your friend again.


Quote:
View Post
IIRC you only get non-residency for part years as a concession, if your intent was to leave the country permanently.
Not true....
Reply With Quote
This user would like to thank The ScottiCH One for this useful post:
  #8  
Old 30.10.2015, 21:14
Forum Veteran
 
Join Date: Aug 2011
Location: Rotkreuz ZG
Posts: 504
Groaned at 2 Times in 2 Posts
Thanked 563 Times in 268 Posts
heckenhocker has an excellent reputationheckenhocker has an excellent reputationheckenhocker has an excellent reputationheckenhocker has an excellent reputation
Re: Tax question: UK resident working in Zurich for a year

http://www.expattax.ch/resources/Swi...x%20system.pdf explains the tax deductions for expats. They have been tightening up the system on the definiton of expat. (see page 9) If you are not transferring for the same employer, it's unlikely you'd qualify
Reply With Quote
This user would like to thank heckenhocker for this useful post:
  #9  
Old 31.10.2015, 09:17
NotAllThere's Avatar
Forum Legend
 
Join Date: Oct 2008
Location: Baselland
Posts: 8,968
Groaned at 140 Times in 122 Posts
Thanked 12,245 Times in 5,008 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
Not true....
My aim was not to consider criteria for residency, rather criteria for non-residency. The main point is only about whether eligibility for split year treatment, if you meet all other criteria for non-residency. And what I've said about that is exactly correct. http://www.hmrc.gov.uk/manuals/rdrmmanual/rdrm10420.htm
Strictly, an individual is taxed as a UK resident for the whole of a tax year when they are resident here for any part of it. But, if the individual leaves or comes to the UK part-way through a tax year, the year may, by concession, be split (extra-statutory concession A11).
...

This split-year treatment will apply to individuals who:

come to the UK to take up permanent residence or to stay for at least two years, or
leave the UK to become permanently resident abroad, or
leave the UK for full-time service under a contract of employment for at least a complete UK tax year

Important parts highlighted. Therefore, if you come to Switzerland in January 2016 for a job that is intended to last a year, as the OP is, you are not eligible for split year treatment. Of course, even if you are eligible for split year treatment, that doesn't mean you find that on other criteria you are not eligible for non-residency at all - on the grounds mentioned above.

For the specific situation under consideration, the OP will not be spending an entire UK tax year in CH. He isn't leaving the UK to become permanently resident in CH. Therefore he will be paying tax in both countries. If he's on over 120K CHF, he will have to fill in a tax return in both countries (if less, then he will still need to fill in a UK tax return). He will not be non-resident in the UK.
__________________
In accordance with Political Correctness guidelines, I've checked my privileges and come to the conclusion that I'm awesome.

Last edited by NotAllThere; 31.10.2015 at 09:31.
Reply With Quote
  #10  
Old 31.10.2015, 09:30
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,724
Groaned at 209 Times in 181 Posts
Thanked 11,034 Times in 6,259 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
I'm talking only about whether you're eligible for split year treatment, if you meet all other criteria for non-residency. And what I've said about that is exactly correct. http://www.hmrc.gov.uk/manuals/rdrmmanual/rdrm10420.htm

Strictly, an individual is taxed as a UK resident for the whole of a tax year when they are resident here for any part of it. But, if the individual leaves or comes to the UK part-way through a tax year, the year may, by concession, be split (extra-statutory concession A11).
...

This split-year treatment will apply to individuals who:

come to the UK to take up permanent residence or to stay for at least two years, or
leave the UK to become permanently resident abroad, or
leave the UK for full-time service under a contract of employment for at least a complete UK tax year


Important parts highlighted. Therefore, if you come to Switzerland in January 2016 for a job that is intended to last a year, as the OP is, you are not eligible for split year treatment. This is the OP's situation as I understand it. He will be paying tax in both countries. If he's on over 120K CHF, he will be filling in a tax return in both countries (if less, then he will need to fill in a UK tax return). He will not be non-resident in the UK.

Of course, even if you are eligible for split year treatment, that doesn't mean you find that on other criteria you are not eligible for non-residency at all - on the grounds mentioned above.
The page you link to, may or may not be accurate.
If you look further at further links from that page there is talk of 'being ordinarily resident', a concept that has no relevance after 6 April 2013, when the statutory definition of residence became law.
Reply With Quote
  #11  
Old 31.10.2015, 09:32
NotAllThere's Avatar
Forum Legend
 
Join Date: Oct 2008
Location: Baselland
Posts: 8,968
Groaned at 140 Times in 122 Posts
Thanked 12,245 Times in 5,008 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

Perhaps. I bet you he won't qualify for non-residency regardless!
Reply With Quote
This user would like to thank NotAllThere for this useful post:
  #12  
Old 31.10.2015, 09:38
Fish Paste's Avatar
Senior Member
 
Join Date: Jun 2013
Location: North
Posts: 362
Groaned at 7 Times in 4 Posts
Thanked 422 Times in 201 Posts
Fish Paste has earned the respect of manyFish Paste has earned the respect of manyFish Paste has earned the respect of many
Re: Tax question: UK resident working in Zurich for a year

The important thing for the OP to know is he will be liable
for UK tax for the next tax year (2016/2017).

Boxy needs to weigh up the costs of living in Zurich plus other expenses and UK personal commitments before making the decision.

Most of these FTC positions, in UK also, are actually positions traditionally filled by a contractor/consultant as it will be a project, but the company does not want to spend the money.
Reply With Quote
  #13  
Old 31.10.2015, 13:33
Junior Member
 
Join Date: Oct 2014
Location: Aargau
Posts: 37
Groaned at 0 Times in 0 Posts
Thanked 24 Times in 14 Posts
The ScottiCH One has earned some respectThe ScottiCH One has earned some respect
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
Strictly, an individual is taxed as a UK resident for the whole of a tax year when they are resident here for any part of it. But, if the individual leaves or comes to the UK part-way through a tax year, the year may, by concession, be split (extra-statutory concession A11)..
Not true - from 6 April 2013, the legislation allows a tax year to be split into two parts in five specific circumstances where previously it was by extra-statutory concession A11. See RDR 3 for details.


Quote:
View Post
Therefore, if you come to Switzerland in January 2016 for a job that is intended to last a year, as the OP is, you are not eligible for split year treatment.
Not necessarily true under new legislation - this site puts it better than I could: http://taxaid.org.uk/guides/informat...year-treatment

"When someone leaves the UK to work abroad full-time they may apply split year treatment in the following circumstances. They need to leave the UK to work abroad, and be non-UK resident in the following tax year by passing the AOT (automatic overseas test) working abroad test. Split year treatment will then apply in the tax year in which they leave the UK so long as:

You were resident in the UK in the previous tax year
You will be working sufficient hours abroad from the date you leave the UK until at least the end of the tax year in which you leave the UK

You must be non-resident in the UK in the following year by meeting the third condition (working abroad) of the Automatic Overseas Test. There are detailed rules on how to work out number of days and time limits."

...so if in 2016/17 the OP finishes his employment contract in Jan '17 they could find another role to last until April; they could travel the world for a few months; etc, etc. There are lots of options available for the OP to spend money in far more enjoyable ways than giving it to hmrc by not timing the return date properly :-)


Quote:
View Post
The important thing for the OP to know is he will be liable
for UK tax for the next tax year (2016/2017).
This is not necessarily correct. With the limited information we have the OP may be able to claim split-year treatment upon leaving the UK and therefore would not have to pay UK tax on their Swiss earnings if they meet all the relevant criteria as outlined in RDR3.

The OP needs to speak to someone who can go through all their affairs and give proper advice. Alternatively if they are able to read and understand the RDR3 document thoroughly then they should be able to self diagnose:

https://www.gov.uk/government/upload...ted_078500.pdf

This is also quite a good simple overview: http://www.accountingweb.co.uk/artic...plained/544622

It is also possible to call HMRC and ask for a 'technical callback' from an advisor who will give definitive answers (but not advice).

Good luck
Reply With Quote
This user would like to thank The ScottiCH One for this useful post:
  #14  
Old 31.10.2015, 13:49
NotAllThere's Avatar
Forum Legend
 
Join Date: Oct 2008
Location: Baselland
Posts: 8,968
Groaned at 140 Times in 122 Posts
Thanked 12,245 Times in 5,008 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: Tax question: UK resident working in Zurich for a year

https://www.gov.uk/government/upload...ted_078500.pdf page 51 onwards.
Quote:
View Post
...
...so if in 2016/17 the OP finishes his employment contract in Jan '17 they could find another role to last until April; ...
Yeah well, obviously if he doesn't return to the UK for the whole tax year he won't be liable for that year.

Anyway - online test tool here: http://tools.hmrc.gov.uk/rift/screen...ary?user=guest

Last edited by NotAllThere; 31.10.2015 at 14:03.
Reply With Quote
  #15  
Old 31.10.2015, 14:46
Junior Member
 
Join Date: Oct 2014
Location: Aargau
Posts: 37
Groaned at 0 Times in 0 Posts
Thanked 24 Times in 14 Posts
The ScottiCH One has earned some respectThe ScottiCH One has earned some respect
Re: Tax question: UK resident working in Zurich for a year

Quote:
View Post
Yeah well, obviously if he doesn't return to the UK for the whole tax year he
Interestingly with the new rules he might not even have to last the whole tax year before coming back...

In the following tax year - in this case 2016/17 - in order to meet the third condition (working abroad) of the Automatic Overseas Test the following need to be met:

work full-time abroad (35 hours a week, calculated by a special method);
be in the UK for less than 91 days; and
spend less than 31 days working in the UK (a ‘working day’ means working for more than 3 hours in any day)

...in theory this means it's possible to return to the UK from 5th January 2016 (<91 days) and start working after 23rd February (<31 days) and still be non-resident up to that point. Obviously any UK income after returning would be subject to UK tax as normal but any prior Swiss earnings should be safe.
Reply With Quote
This user would like to thank The ScottiCH One for this useful post:
Reply

Tags
tax advice




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Tax question for Swiss working in foreign University okost Finance/banking/taxation 9 18.04.2012 22:21
Uk Resident working in Switzerland - UK tax apacuk Finance/banking/taxation 3 03.05.2011 17:00
Resident in Switzerland / Working in London / How to optimise tax? workinuk Finance/banking/taxation 16 18.05.2010 15:03
Swiss Tax - paid by UK company but working in Zurich necrosus Finance/banking/taxation 0 15.04.2009 12:14
UK tax on UK shares for a Swiss resident? GenevaSculler Finance/banking/taxation 13 04.01.2009 11:18


All times are GMT +2. The time now is 16:44.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2016, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0