Hello

I am reading through a lot of things, but basically, I can't really get to the bottom of it. I live in Zurich and commute to London for a few days every week to work. I have one employer there paying me through PAYE and another one by invoice. Now, is there something I can do to avoid paying the UK tax rates on that income? I prefer to pay swiss taxes as they tend to be lower... Any ideas would be appreciated!! Thanks. (I am Swiss, resident in Switzerland).

Andy

The only way you can avoid UK taxes is to spend less than 90 nights per tax year there. That way you can be classed as "Not Ordinarily Resident" for UK tax purposes. The UK tax year runs 6 April to 5 April. You either need to call the Tax Office in Newcastle or your local one to tell them this or get a UK accountant to handle your tax affairs for you. Good luck! AM.

I am not 100% sure, but I think one has to spend less than 180 days in UK in order to be qualified as a non-resident. I have not seen anything about 90 days on HMRC website in their non-resident section. However, if you spend 90 days in Switzerland you are liable for paying tax in Switzerland unless you claim relief under a double taxation act. But I woudl also like to hear more from people who commute to work in London what the real situation is.

If I understand correctly, you have more than one employer. Could you act as an independant (freelancer) for them? In that case, if you don't have any "fix base of affairs" in the UK but have one in CH, then no UK source tax should be levied on the payments from your UK "clients".

Regardless of how much time you spend in the UK, your UK income will be subject to UK income tax at 20% / 40% / 50% as it is from UK earnings. You may get a Personal Allowance (around £6035 as a standard deduction) to set against that, but you'd need to check.

You should do a tax return each year by 31 Jan for the year ended on 6 Apr the previous year, in which you get credit for the PAYE deductions.

It looks like you have a combination of employment and self-employment (i.e. a trade) - I think that normally there is no tax witheld from business income (which you can set against expenses from that trade), but if you are an employee of the first business they will be required to operate PAYE on your salary.

One optimisation strategy might be to set up a company, but you'd need to take professional advice about doing that.

Finally, my understanding is that the non-residency rule is based on 180 days in any given year, and an average of 90 days of a number of years. However, this really applies in respect of non-UK income.

Plenty of info from the horses mouth here:

http://www.hmrc.gov.uk/CNR/

http://www.hmrc.gov.uk/CNR/faqs_general.htm

I had a friend that commuted every day to London City Airport for work in Canary Wharf. Becuase he hardly ever stayed overnight he did not pay UK tax. He said it was still cheaper even with the air fares.

There would need to be many different factors to take into account before someone could be considered to be outside the UK tax net legitimately by doing this.

Leaving aside questions of regular and habitual travel, if s/he is in an employment contract of service (master/servant relationship rather than freelance contractor) then the onus is on the employer to deduct tax at source.

There's more on the latest tax resident / ordinarily resident / domicile rules for the UK here:

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

When I left the Uk I filled in the P85 form to say I was leaving the UK, my UK employer then paid me gross which was then subject to Swiss tax. I too went back and forth, but as some have mentioned you can only spend 90 days in the UK. When I did it they did not count arrival and departure days so a three day trip (arriving Tuesday morning and leaving Thursday pm) was one day. I think this now maybe tighter. Swiss tax is lower than UK (well it was for me).

Ive sent you a pm

I'm a UK national living in UK - I spend 2-4 days each week working in Switzerland. Re 90 days in Switzerland before incurring liability for Swiss tax - is that 90 days in a tax year - and if so, when is the tax year - is it April to April as in UK?

I wondered if anyone else had anything to add as I too will probably be taking a UK contract working out of London from Monday to Friday, travelling back to Switzerland just at weekends. As will be paid in sterling, UK contract and more than 180 days a year in the UK, I will be taxed at source. I presume however that if Im coming back most weekends to Switzerland where I am currently resident, I will continue to be resident as this will be more than 90 days a year? Is the only thing I can do use the double taxation treaty to avoid having to pay Swiss tax on my UK income that I have already had taxed at source in the UK? Would it benefit me to not come back to Switzerland and leave the country permanently? Any advice gratefully received. Many thanks.

There maybe something here

http://www.taxation.ch/index.cfm/fus...path/1-537.htm

As of the 6th April 2008 the days of arrival and travel will be included for tax residency purposes.

As I understand it, that is a "may be included for tax purposes". This is to catch people who arrive on a morning and do a day's work, or leave in the evening, having done a day's work.

If you average over 90 days over a rolling four(I think) year period, or spend more than 180 days in any one year, then you are resident for tax purposes.

It looks as if you may become a "dual resident". This is something well known to HMRC. You will get some, but not much, help from the tax treaty, mostly in the form of tax credits for taxes paid to the "other" country. http://www.hmrc.gov.uk/helpsheets/hs302.pdf You may be able to "game" the social security/national insurance/AVS treaty to your advantage, gaining state pension credits from both countries.

One option would be to declare your Swiss address as your permie address - and then your UK one as your 2nd home.

You can then claim a lot of expenses back against tax - including rent. It is basically what the MPs were doing - and it is technically legal.

I used Parasol when I was in the UK and they took care of the paperwork (for a fee) - but it did mean my net UK tax exposure was similar to Swiss income tax.

However, it can only be done for 2 years - which is why the MPs moved residences!!