The standard way that IT contracting works in the UK is (or at least was, I don't know if it is still done the same way) you create a limited company and install yourself as director and employee, and get to save a load on taxes. Well, that's the idea anyway Does the same situation exist in Switzerland - can I have a UK private limited company and sell my time and skills to companies in Switzerland while being resident there?

Yes, I'm a pest asking all these questions. Sorry!

you can I guess but it would be more work that is necessary.

I contracted here for 6 years and within 1 year wound up my UK limited company.

Tax -vs- effort to avoid (akin to UK sole trader, IR35, etc) meant that I just crontacted via a company. Here, you'd need a GmbH and a bucket of cash to put in for the liability. IMO not worth it, especially in the early days here.

tts,

Those days are long gone in the UK... Most contractors I know ended up becoming employees of umbrella companies in the UK. But onto your question:

There is of course nothing stopping you from using a UK-based company to provide services to a Swiss agency or client. You would of course, already have to have a permit which allowed you to do your own thing without being tied to a Swiss company, but I am presuming you already have this.

There would be two angles to consider:

1. The taxation situation of the UK company
2. Your personal taxation

With regard to the taxation of the UK company, unless there was a services agreement in place between the UK company, and let's say "a third party" you would have a hefty corporate tax bill to pay in the UK.

Your personal taxation would still be an issue - the UK company would presumably have to pay you some salary, and you'd then have to declare that to the swiss and pay all your taxes.

Depending on how much you earn, and what your plans are, you might find that this structure isn't worthwhile. You might want to think about moving both you and your Swiss company to Schwiez or Zug - you might save a bundle. Again - depends on how much you earn.

Maybe 75% contractors I know are in limited company ("GMBH"), but they don't recommend it unless it's long term because of the overheads of setting up. So I'm umbrella as an employee of my agency, for now anyway, just started contracting again.

I read somewhere it's a lot of hassle to work via a UK or even offshore "Ltd" - sorry i can't remember where I read that.

FYI: http://217.150.243.58:8888/revenueestimate/ to get an estimate.
It then gives an error amd you have to enter your tax rate manually from here: http://www.steueramt.zh.ch/html/steuerfuesse/index.htm

don't expect to pay less tax in switzerland than a uk ltd.

contracting here is a nightmare. If you come don't live in zurich itself, chose Zug.. Zurich has high tax and social security (nearly 40% in all)

Example:

Income 450 per day.
Employers social security 8% (your agency might hide this)
employee social security (all) 8%
income tax 20% (deduct at source)
health insurance - 100 pounds a month

with the rate shown, you will net arround 290 per day

geneva is even worse

Is that 450 CHF or 450 GBP?

I agree somewhat with en184, but...

However it is worth mentioning:

1. Employer and employee taxes include:
-Unemployment insurance (70/80% of up to 106,800 CHF)
-Accident insurance (work and non work related)
-Salary continuation insurance
This is all extra insurance you would have to take in the UK

2. The employers cut also includes FAK (Family allowance) which can be claimed if you have kids (even if divorced) and reduces your tax.

3. Pay more pension (GMBH or umbrella) as you would in the UK

In raw cash then perhaps it looks bad, but consider the "package" together.
And, my commute here is a lot easier than in it would be in London...

Sterling. I think +-1000 CHF / per day is a typical contracting rate these days..

Another point, once your L work permit ends, the swiss will kick you out I expect. So, you pay the taxes for the swiss, and get nothing in return.

Are you actually contracting in CH?

at the moment..

In the UK was able to contract through a ltd company, and had very good results (80% in hand)..

I have been to Zurich. Switzerland looks like a really good place to contract and it's something I am considering for the future.

The information here about rates and life in Switzerland is really interesting. An agent told me that the going rate for some of the major finance companies in and around Zurich is 90 CHF an hour, not that you always believe agents :-) Is 1000 CHF per day the normal rate? A friend in IT suggested 100 CHF per hour should be the minimum. Switzerland seems more expensive than other countries for food shopping and accommodation, but you have a good quality of life in return.

What is the working environment like? How does it compare to London or other European locations? Is it stressfull or hierarchical?

Not sure if this helps or not.


I know an agent who will support you in making the best of taxes. What this means in reality is that you will get "paid" a basic swiss salary [with the incumbent taxes etc etc] and the rest will go off shore tax free. I assure you that the service you will get from this agent wil be pretty much the best you can receive anywhere.

This I know from 2 very good friends of mine and my girlfirend, all of whom were contracting via this guy ;o)

Regards

Buzby