Hello,

I'm new to posting here but the forum has been a great help while i've been getting adjusted to life in Switzerland - about 5 months now.

I'm sorry if this has been covered comprehensively already, and if so please feel free to point me in the direction of a previous post or something as I'm struggling a little to find what I'm looking for...

I've set up as an Einzelfirma and have my permit, but i'm struggling to get my head around the 'getting money transferred' issue. As my German skills are still developing most of my clients are in the UK at the moment and I'm currently asking them to pay into my UK account (because it's easy and charge-free for them - which is important) and then i'm intending to withdraw it here and place into a Swiss bank account. I have a strong feeling that there is a problem with doing this, which is beyond the inconvenience, and I'd be very interested in hearing suggestions.

Would the step of using my UK account, as a kind of intermediary holding, mean that it's up for grabs for the UK Tax system? - I'm currently trying to research everything. Alternatively what would be the simplest way of this working and it not costing a huge amount? Asking UK clients to pay directly into a Swiss account (in CHF) and then try to work out the charges and factor it into the invoice? Or would an Internet Merchant Account or something work better? I'm reluctant to start asking UK clients to transfer to a Swiss account because there looks to be a £20 charge whatever the amount, and for most of my invoices that's quite a large chunk.

I would be very grateful of your advice or experience on the best method to employ, as I'm worried that this current temporary arrangement means that i should be, in effect, paying tax in the UK and Switzerland, which as you can imagine I'd quite like to avoid :-).

I hope that I've made sense, as you can probably tell my brain isn't geared to tax and problems like this so please feel free to answer as if i'm a simpleton.

Many thanks in advance,

Alex

The bottom line(s) is/are what amounts are we talking about and do you complete a UK tax form as well as your Swiss one?

If amounts are small (say under £20,000 year) then I don't think the authorities will be too worried as long as the income is declared somewhere. You won't be taxed in both countries, however a UK tax-free allowance could be useful if paying tax in the UK too. The UK has the advantage that they do not require bank details on the tax declaration, so paying only in Switzerland is not a problem. I do this with small and occasional work from the UK and add to my income here.

Your UK customers will clearly not appreciate being billed and paying in CHF. Your UK bank will charge for transfers, so do this a infrequently as possible

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Thank you for the reply.

I don't expect the amount to exceed £20,000, and I'm not intending to submit a tax-return in the UK, as this I've only ever been self-employed since being in Switzerland. So I consider it to be a Swiss business which has just UK clients so far.

I'm just a bit worried that getting clients to pay into a UK account and then taking the money out here (free cash withdrawal) constitutes getting an income in the UK (and so I need to declare it and be taxed in the UK).

I imagine that I should contact the UK tax office for guidance, but I imagine that they want to get something and obviously I'm reluctant to do that if I don't need to or there's a simple way around it.

I'm also currently adding on VAT to invoices so I realise that I need to change this and just have all-in fees.

The UK tax-free allowance is around £6500 or so isn't it?, I may well earn over this from UK clients in a year. Does this not exist in Switzerland? I thought I read that it does.

Some options
You could open a Swiss bank account denominated in Sterling so your customers pay in Sterling. May have high transfer fees for your customer payments.

You could open a Swiss bank account denominated in Euros so your customers pay in Euros. There are special lower transfer fees for your customer when they transfer euros between UK & Switzerland. "The reason is due to EU regulation, EU and EEA countries are not allowed to charge more for a cross-border payment made in €Euros with ‘shared charges’ selected than they are for a domestic transfer."

Another possibility for you is to open a www.paypal.com account; assuming your customers would pay you via PayPal

How would the UK tax authorities know about this income?

Never ask anyone to make a decision for you. The answer will be 'no'.

No VAT should be added as Switzerland is outside the EU. Also your UK income at under £20,000 is below the level you need to charge VAT anyway. (What do you do with this VAT? Your clients may try to claim it back too.) Also worth reminding companies in the UK when they bill you - no VAT on their invoices too - works both ways.

Yes, it exists in Switzerland. But if your UK income was declared in the UK, then you could use the UK allowance - and then use the Swiss tax free allowance on income raised here...

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thanks AbFab and Marton.

I think i'm getting myself in a bit of a tangle due to my lack of experience.

Is there a useful resource or website that I can get guidelines on what I should be doing? Or maybe I can seek advice at my Swiss bank? I've found the taxation.ch site, but i think I need it spelt out to me simply.

If i'm only running a very small company should I be charging only 'all-in' fees to customers in the UK and not mention any thing about VAT or tax, and then I assume I just submit this in January or whatever and the Swiss authorities will take the income tax off that. And I should just take account of this percentage in my original rates.

I apologise again for my basic level of enquiry, again please do just feel free to direct me to a page or thread that has previously spelt it out and say 'just read this!'

If there are any freelancers who have 'been through' this then any advice/pointers would be gladly welcomed.

I will have a look at the Swiss Paypal site, as it may be the simplest approach and cheapest for my clients. Although their charges are a little unfavorable. If this gets around the UK tax problem or avoids any possible problem that would be good. Although if using a UK account isn't a problem I guess that I could just do one transfer of everything at the end of the month and suck up the fixed charge myself.

thank you again.

The "useful resource" is EF! All the info you want has been covered here before - search 'how to freelance'.

If you are not registered for VAT (here or in the UK) you cannot collect it on your invoices. As CH is not in the EU, you don't even charge it on sales between, if you were registered.

If you have a UK bank account, can't your clients pay into that and you transfer here periodically? Otherwise Paypal UK is possible. There is no charge for transfers over about £150 but they take 3.5%-ish commission.

You need to complete an additional sheet with your Swiss tax form Hilfsblatt A. Again this has all been covered before here.

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You've been given some great advice, but I just wanted to add that being paid by your UK clients in CHF is very useful as the currency is more stable. I started invoicing my UK clients in CHF from January as the fluctuating pound made it difficult to know what my income would be month on month. The bank fee is approx. CHF8 but my clients absorb this fee.

Good luck!

My Swiss Post Finance have just announced automated information per SMS about inpayments, overdrawn etc.

https://www.postfinance.ch/pf/-/cont...._eflogin.html