Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 12.05.2011, 16:19
Newbie
 
Join Date: May 2011
Location: UK
Posts: 5
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
MarmiteVsVegemite has no particular reputation at present
Tax on Travel Between UK and Switzerland

Hi All

First post but then also the first time I have had an opportunity to work in Switzerland.

I live with my family in the UK and am happy with that arrangement for now. I have however been offered a position with a single employer but where I would have to work both in Switzerland and the UK. This is attractive to me as it gives me a chance to "try before you buy". If I love it then maybe a move to Switzerland could be on the cards in the future.

Nothing has been confirmed yet but it looks like I would expect to spend 2/3 days every week in Switzerland and then 2/3 days every week in the UK. My employer has offered to pay for the flights, hotel and food however I'm wondering what the UK tax man will think of this.

I've read the official blurbs and trawled the web but am still confused. It seems to suggest that the transport to/from Switzerland is claimable but the hotel/food costs will be a fringe benefit and taxable.

Anybody else in this situation and know how the process works?

Thanks in advance.
Reply With Quote
  #2  
Old 12.05.2011, 16:22
dodgyken's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Democratic Republic Kenistan
Posts: 10,653
Groaned at 279 Times in 230 Posts
Thanked 19,403 Times in 7,402 Posts
dodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond repute
Re: Tax on Travel Between UK and Switzerland

I'd double check whether the flights etc are not just normal "expenses".

You're most likely to get a per diem for your food/drinks.
Reply With Quote
  #3  
Old 12.05.2011, 16:28
Newbie
 
Join Date: May 2011
Location: UK
Posts: 5
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
MarmiteVsVegemite has no particular reputation at present
Re: Tax on Travel Between UK and Switzerland

Thanks for the fast reply dodgyken.

What do you mean by normal "expenses". My company have offered to pay the expenses but I'm worried when it comes around to UK tax time I'll end up with a big fringe benefits tax liability from their generosity. Employer doesn't seem to know the answer.

Do you have any suggestions for who I should double check with? I've tried a couple of UK accountants and received different answers from each. Anybody know of a good UK accountant who would definitely know the "right" answer.

Hotel/food/drinks will be paid by employer but again worried about getting hit with a fringe benefit and the subsequent tax.

The salary is not huge so travel costs would be a significant % in relation so if I get it wrong it could really hurt.
Reply With Quote
  #4  
Old 12.05.2011, 17:16
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 15,046
Groaned at 307 Times in 263 Posts
Thanked 23,226 Times in 9,433 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 on Travel Between UK and Switzerland

For the UK taxman, it comes down to where your regular workplace is. Home to office commuting is not allowable. If your regular workplace is so far away from home that you have to stay in a hotel and eat out, then, again, it's not taxable. Have a look on HMRC's website for the "two year rule".

It's possible to be tax resident in two countries. There is a dual taxation agreement between UK and CH. While that simply means you pay (overall) the same tax as the higher taxed country - allowances is where it gets complicated. I'm not surprised you've had two different answers from two different accountants - it maybe that no-one can give you a definitive answer. Until it goes to court and a judge decides.

You might also like to ask your question at www.contractoruk.com forums - while it is a contractor site, we're used to dealing with the issues of cross-border transaction. Just don't post your question in General - the inhabitants are quite savage.

In your case, I'd aim at working 40% in Switzerland, 60% in the UK (presumably at home). In that case, it's most likely that your Swiss office would remain temporary, and therefore hotel and travel would be fully claimable.

I am not an international lawyer/tax accountant!
__________________
Down with racism. Long live miscegenation!
Reply With Quote
  #5  
Old 12.05.2011, 17:50
Newbie
 
Join Date: May 2011
Location: UK
Posts: 5
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
MarmiteVsVegemite has no particular reputation at present
Re: Tax on Travel Between UK and Switzerland

Thanks NotAllThere

Thanks for the reference to the 2 year rule. I've read HMRC's 490 Guide which just confused me more. It will be a permanent job but who knows how long this arrangement would last. I'm a pessimist so when deciding if I should take the role or not I'm going to assume greater than 2 years. I don't have a contract yet and who knows what that will say...

It was this 490 Guide where I thought worst case >40%, >2 years where do I stand. The section "Special tax rules on foreign travel" was what prompted my first post with transport claimable, hotel/food taxed.

What's been your practical experience? If you stay under the magic 40% is it always a temporary place of work? With HMRC there just seems to be so many tangents with nothing being clear.
Reply With Quote
  #6  
Old 12.05.2011, 18:39
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 15,046
Groaned at 307 Times in 263 Posts
Thanked 23,226 Times in 9,433 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 on Travel Between UK and Switzerland

As soon as you know it's going to be more than two years, then the rule kicks in. As yours is a permanent job, you already "know" it's going to be more than two years, so it's the 40% bit you'd have to concentrate on. As far as I'm aware, if you stay 40% or below, then there won't be an issue.

There used to be an exception (in the 90s!) that if your office was abroad, travel and subsistence was fully claimable. But I've not found any such rule in existance any longer.

What is the nature of your work in Switzerland and the UK? There may be other ways of arranging your affairs. It might be possible for you to be resident in CH entirely.
__________________
Down with racism. Long live miscegenation!
Reply With Quote
  #7  
Old 12.05.2011, 18:50
nigelr's Avatar
Forum Veteran
 
Join Date: Apr 2009
Location: Aargau
Posts: 1,712
Groaned at 118 Times in 59 Posts
Thanked 2,140 Times in 942 Posts
nigelr has a reputation beyond reputenigelr has a reputation beyond reputenigelr has a reputation beyond reputenigelr has a reputation beyond reputenigelr has a reputation beyond repute
Re: Tax on Travel Between UK and Switzerland

Are you sure you really want to do this? I travel regularly and it gets too much pretty quickly. Traveling a return flight every week just to work will add to your stress levels I would think.

If it was me I would rather work 2-3 weeks in one place followed by a week in the other just to reduce the traveling.

Just my thoughts, but to me it doesn't sound very attractive regardless of the tricky tax situation.
Reply With Quote
  #8  
Old 12.05.2011, 18:50
Newbie
 
Join Date: May 2011
Location: UK
Posts: 5
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
MarmiteVsVegemite has no particular reputation at present
Re: Tax on Travel Between UK and Switzerland

Thanks NotAllThere

Becoming non-resident is not really an option. Family want to stay in the UK for now. I also want to be in the UK until I assess CH properly. I'm going for the "try before you buy".

Do you know anything about the "Special tax rules on foreign travel"? The flights will be the expensive bit so at least if that's claimable I'm only going to get hit with tax on the food/accommodation.
Reply With Quote
  #9  
Old 12.05.2011, 18:54
Newbie
 
Join Date: May 2011
Location: UK
Posts: 5
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
MarmiteVsVegemite has no particular reputation at present
Re: Tax on Travel Between UK and Switzerland

Quote:
View Post
Are you sure you really want to do this? I travel regularly and it gets too much pretty quickly. Traveling a return flight every week just to work will add to your stress levels I would think.

If it was me I would rather work 2-3 weeks in one place followed by a week in the other just to reduce the traveling.

Just my thoughts, but to me it doesn't sound very attractive regardless of the tricky tax situation.
Hi nigelr
Unfortunately living in aircraft has been my life for many years. I'd love to change it but my career doesn't really allow it. I agree it does take its toll. The only difference is that previously I was all over the world, never in one country for more than about 8 weeks in a year, where now I would be spending most time in the UK/CH with less time in those other locations.
Reply With Quote
  #10  
Old 12.05.2011, 19:47
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 15,046
Groaned at 307 Times in 263 Posts
Thanked 23,226 Times in 9,433 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 on Travel Between UK and Switzerland

Quote:
View Post
Thanks NotAllThere

Becoming non-resident is not really an option. Family want to stay in the UK for now. ...
You become resident. They stay in the UK.

I'm afraid I don't know anything about special rules for foreign travel. My intent was to give you some pointers - but you really do need specialist advice. As you've discovered, that's not easy to find.
Reply With Quote
  #11  
Old 13.05.2011, 09:26
economisto
 
Posts: n/a
Re: Tax on Travel Between UK and Switzerland

I don't know how the HMRC would know whether you had the club sandwich or fillet steak at the hotel. You need a corporate credit card from your employer (or for most things they just pay directly - call the hotel and pick up the tab etc) and they no one will ever know. Also, these aren't fringe benefits anyway, they're the cost to the employer to keep you alive (although if they put you up in the Dolder and the HMRC found out I could see a partial claim being made)
Reply With Quote
  #12  
Old 13.05.2011, 10:02
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 15,046
Groaned at 307 Times in 263 Posts
Thanked 23,226 Times in 9,433 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 on Travel Between UK and Switzerland

That's not how HMRC view it. If you live so far away from your office that you have to stay overnight in a hotel and eat out, that's your decision. Not something forced on you by your employer. In their view, you should move closer. It gets interesting when you are required by your employer to have two places of work...

Corporate credit card is a good idea though.
Reply With Quote
  #13  
Old 13.05.2011, 11:04
Senior Member
 
Join Date: Mar 2010
Location: Rheinfelden
Posts: 485
Groaned at 3 Times in 3 Posts
Thanked 183 Times in 121 Posts
Bexie has an excellent reputationBexie has an excellent reputationBexie has an excellent reputationBexie has an excellent reputation
Re: Tax on Travel Between UK and Switzerland

Unless you are a member of Parliament of course. Private law for them (Priviledge)
Reply With Quote
  #14  
Old 19.05.2011, 14:35
Senior Member
 
Join Date: May 2011
Location: Zurich
Posts: 481
Groaned at 1 Time in 1 Post
Thanked 267 Times in 168 Posts
gourmet is considered knowledgeablegourmet is considered knowledgeablegourmet is considered knowledgeable
Re: Tax on Travel Between UK and Switzerland

I have been an IT contractor in the UK for a very long time and is currently in the middle of move to Switzerland. I might be able to help with this expense thing as I lived out of a suitcase for a long time.

First of all, where is your salary is being paid? in the UK or in Switzerland? If it is UK, then you have nothing to worry about tax as it is all PAYE. (my understanding is that you are an employee)

Secondly, there is something call P11D per year that you need to fill in if you claim expenses. That is expenses paid out of your pocket and even if you claim in full, you still have to pay for it. The thing HMRC is going to get you on most is private car use (i.e. mileage allowance). So to avoid this paperwork, get a company credit card and use taxi/public transport for ALL your expenses, then you do not have to fill this in. Besides having a company credit card, it is down to your company to sort out the bills; just remember to keep all receipts.

Thirdly, try not to do this shuttling too much. A week split into two places are going to get to you very quickly. I can cope with one location once a week, even with that I tends to do like "commuting" every fortnight. It is not about the cost but your time as well. Traveling is dead time. You have to get to airport early, hang around, delay, waiting for luggage etc. I could write a book about airport and airlines, especially BA! The novelty will wear off very quickly. Besides if you only in Switzerland 3 days a week with no weekend, you got your workload to finish, so early start - late finish; when are you going to experience the Swiss life?

Just my 2p worth. (still can't work out the equalvant in CHF)
Reply With Quote
Reply




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 Deduction for Travel Littlestar Finance/banking/taxation 1 16.02.2011 17:41
Looking for advice to travel to Switzerland Bowl_Pho Travel/day trips/free time 1 09.07.2010 14:58
Best Travel Guide for Switzerland magic_castle32 Travel/day trips/free time 5 10.09.2009 03:29
Travel around in Switzerland from Lausanne (tips and travel companions wanted) yli Travel/day trips/free time 1 01.07.2009 08:34
Tax deduction for travel-to-work costs ? potom Finance/banking/taxation 1 14.02.2009 15:23


All times are GMT +2. The time now is 17:27.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0