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  #41  
Old 07.06.2016, 15:13
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Re: HMRC UK tax on Swiss Income

It sounds wrong.

Not only is tax in the UK not 40% - it's only 40% on anything earnt over 43,000 (see https://www.gov.uk/income-tax-rates/...and-allowances) but the way it works is that HMRC will calculate the UK tax owed as if you earnt the money in the UK and then you can deduct the tax paid in Switzerland under the relevant double taxation agreement (see https://www.gov.uk/government/public...aties-in-force).
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  #42  
Old 07.06.2016, 15:18
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Re: HMRC UK tax on Swiss Income

Per the accountant, no, "He has three ties in that year - a home in the UK, family in the UK and having spent more than 90 days in the UK in one of the previous three tax years. At three ties, the threshold for non-resident status is set at 45 days and so as he exceeded this during 2015/16, he fails this test and remains UK tax resident for this year."
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  #43  
Old 07.06.2016, 15:22
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Re: HMRC UK tax on Swiss Income

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Sorting out HMRC returns, and the UK accountant states he needs to pay a further 40% of the income after he's paid Witholding Tax in CH (salary less witholding tax = HMRC taxable income).

Surely, this isn't correct? I'm not an accountant, which is why we've hired one (recommended on these boards).
You need a new accountant, or to check the information a bit more closely. He's probably right that husband owes UK tax on the Swiss income....but (CH salary minus CH tax) will not be the basis of HMRC taxable income.

We had a similar case in our office (Baar) last year where the employee's family and children remained in UK, HMRC taxable income was calculated exactly as per normal rules for UK (i.e. gross income minus personal allowance).

But that person did work from home in UK quite a bit. If your husband is working 100% in Switzerland, then it would be worth getting some decent advice - from memory there should be some way to get the days not worked in the UK excused from UK taxes. I think it requires more than 183 days in CH, and the company he works for to be registered as a Swiss legal entity.

The CH taxes paid were then allowed as foreign tax credit (i.e. reducing the amount of UK tax due).

It won't work out precisely as "40% in UK minus 15% in CH".....because CH taxable income has a different definiton to HMRC taxable income, and the tax bands (20%, 40% in UK) are different to Swiss bands.

Another problem will be timing....it might be hard to prove the total CH taxes due at the time the UK return has to be done. I'm still waiting for my 2014 CH tax calculation.....
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  #44  
Old 07.06.2016, 15:29
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Re: HMRC UK tax on Swiss Income

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You need a new accountant, or to check the information a bit more closely. He's probably right that husband owes UK tax on the Swiss income....but (CH salary minus CH tax) will not be the basis of HMRC taxable income.

We had a similar case in our office (Baar) last year where the employee's family and children remained in UK, HMRC taxable income was calculated exactly as per normal rules for UK (i.e. gross income minus personal allowance).

But that person did work from home in UK quite a bit. If your husband is working 100% in Switzerland, then it would be worth getting some decent advice - from memory there should be some way to get the days not worked in the UK excused from UK taxes. I think it requires more than 183 days in CH, and the company he works for to be registered as a Swiss legal entity.

The CH taxes paid were then allowed as foreign tax credit (i.e. reducing the amount of UK tax due).

It won't work out precisely as "40% in UK minus 15% in CH".....because CH taxable income has a different definiton to HMRC taxable income, and the tax bands (20%, 40% in UK) are different to Swiss bands.

Another problem will be timing....it might be hard to prove the total CH taxes due at the time the UK return has to be done. I'm still waiting for my 2014 CH tax calculation.....
Thank you for this. I don't dispute that he owes money to HMRC, but the straight 40% doesn't seem right.

Can you recall which tax company your colleague used? It may be worth a quick chat before I proceed any further with the chap we've already engaged.
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  #45  
Old 07.06.2016, 15:38
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Re: HMRC UK tax on Swiss Income

Hi, it would have been EY.
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Old 07.06.2016, 15:46
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Re: HMRC UK tax on Swiss Income

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Surely, this isn't correct? I'm not an accountant, which is why we've hired one (recommended on these boards).
Firstly, anyone can call themselves an accountant in the UK and work as an accountant with no qualifications whatsoever and no tax knowledge whatsoever.

Find a chartered tax adviser in your town using this search tool: https://core.tax.org.uk/

And check that they have the right specialisms (e.g. personal tax and not corporate tax).
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  #47  
Old 07.06.2016, 15:49
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Re: HMRC UK tax on Swiss Income

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Firstly, anyone can call themselves an accountant in the UK and work as an accountant with no qualifications whatsoever and no tax knowledge whatsoever.

Find a chartered tax adviser in your town using this search tool: https://core.tax.org.uk/

And check that they have the right specialisms (e.g. personal tax and not corporate tax).
I'd also consider writing a letter to your MP - ask them who they use
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