Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #1  
Old 26.02.2012, 15:06
Newbie
 
Join Date: Feb 2012
Location: United Kingdom
Posts: 1
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
illuminatio has no particular reputation at present
Need help! Paying tax as a self-employed person receiving income from a UK agency

I know that many, many threads have gone before this one regarding the issue of paying tax as a short-term resident in Switzerland. Unfortunately, having searched through a great number of them, I can't find specific advice which relates to my own situation and, in addition, I have found plenty of conflicting advice from various sources. I was hoping that someone here might be able to set the story straight if I lay out the detail of my situation here. Please ask if anything is unclear and, if you have an answer, I would be very much obliged if you could share it!

So here's the deal. I'm a self-employed person currently living in Britain. Well, I will be self-employed in the 2012-2013 tax year (I am leaving my current job in March). I have a UK residence but am single and without dependants. I have just been offered a contract by a UK agency to work as a private tutor for a Swiss family living in Zurich. This is the crucial bit:

- The contract is six months in length, fixed-term.
- The client will pay my UK agency directly and the UK agency will then pay me via my British bank account. (I.e. the agency bills the client and I invoice the agency).
- My health insurance will be paid for by the client.
- My accommodation will be provided by the client.
(N.B. The client and the agency have signed a contract together - I have a separate contract between myself and the client regarding the provision of services, hours expected to work, health insurance/accommodation provision and so on.)

Now, I am fully aware that I will need to apply for a residence permit (I assume the 'B' one?) but I am still very unsure about what tax I will have to pay and how I should register with the Swiss authorities since I will not be receiving money directly from anyone in Switzerland, it will be going via the UK agency. I expect to pay tax in Britain since under HMRC's rules I will not be a non-resident. However, what I am unclear about is how I will pay tax in Switzerland and under what denomination or category my income will be taxable, since it is UK income for work carried out in Switzerland.

Does anyone have any advice on this situation? Or, does anyone know of a Swiss-based tax advisor (who isn't too expensive) and who could help?
Reply With Quote
  #2  
Old 13.03.2013, 12:50
Junior Member
 
Join Date: Oct 2012
Location: paris
Posts: 82
Groaned at 0 Times in 0 Posts
Thanked 15 Times in 6 Posts
thomas houghton has earned some respectthomas houghton has earned some respect
Re: Need help! Paying tax as a self-employed person receiving income from a UK agency

If you're only their for 6 months you will be on an L permit (one year permit).
B permit is for a longer term, 5 years. Both B and L are taxed at source like they do in the U.K. it's not for you to worry about, it's your employers business. Only when you receive your C permit (which is like a swiss permanent residency permit)- for an EU resident that takes 5 years of living here- then you pay your own tax.


So don't worry just arrive and work. Your employer should be sorting out everything. Just make sure you're health and accident insurance are paid and then you're laughing.
Reply With Quote
  #3  
Old 13.03.2013, 13:21
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,376
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Need help! Paying tax as a self-employed person receiving income from a UK agency

Under UK tax rules the OP will remain a UK taxpayer, a temporary assignment is not leaving permanently to do a full time job for at least 1 full tax year, however imaginative one is!
Reply With Quote
  #4  
Old 13.03.2013, 14:31
Battlekitten's Avatar
Member
 
Join Date: Aug 2011
Location: Ruschlikon
Posts: 110
Groaned at 0 Times in 0 Posts
Thanked 102 Times in 47 Posts
Battlekitten is considered knowledgeableBattlekitten is considered knowledgeableBattlekitten is considered knowledgeable
I am confused now

So where is the original poster taxed?
UK or Switzerland?. Last answer and hmrc suggests former but the other one says Switzerland

We will be employing a UK maternity nurse soon. She is self employed in the UK so the last time things were simple. We pay her, she deals with the taxes Etc
Now in Switzerland I am ready to tear my hair out
Reply With Quote
  #5  
Old 14.03.2013, 15:15
Member
 
Join Date: Nov 2009
Location: Zürich
Posts: 151
Groaned at 1 Time in 1 Post
Thanked 79 Times in 41 Posts
big yin is considered knowledgeablebig yin is considered knowledgeablebig yin is considered knowledgeable
Re: Need help! Paying tax as a self-employed person receiving income from a UK agency

Quote:
View Post

So here's the deal. I'm a self-employed person currently living in Britain. Well, I will be self-employed in the 2012-2013 tax year (I am leaving my current job in March). I have a UK residence but am single and without dependants. I have just been offered a contract by a UK agency to work as a private tutor for a Swiss family living in Zurich. This is the crucial bit:

- The contract is six months in length, fixed-term.
- The client will pay my UK agency directly and the UK agency will then pay me via my British bank account. (I.e. the agency bills the client and I invoice the agency).
- My health insurance will be paid for by the client.
- My accommodation will be provided by the client.
(N.B. The client and the agency have signed a contract together - I have a separate contract between myself and the client regarding the provision of services, hours expected to work, health insurance/accommodation provision and so on.)

Now, I am fully aware that I will need to apply for a residence permit (I assume the 'B' one?) but I am still very unsure about what tax I will have to pay and how I should register with the Swiss authorities since I will not be receiving money directly from anyone in Switzerland, it will be going via the UK agency. I expect to pay tax in Britain since under HMRC's rules I will not be a non-resident. However, what I am unclear about is how I will pay tax in Switzerland and under what denomination or category my income will be taxable, since it is UK income for work carried out in Switzerland.

Does anyone have any advice on this situation? Or, does anyone know of a Swiss-based tax advisor (who isn't too expensive) and who could help?
This sounds like a bit of a tricky one: but here is how I think it works (up to a point).


In Switzerland, you can register as self-employed and get a B permit, as long as you’re an EU citizen (according to www.gruenden.ch). You may have to pay Swiss or UK social security (NI) contributions, but probably not both (maybe someone else can confirm?).

You might well need to register as self-employed with an ‘Ausgleichkasse’ such as SVA, in order to make their social security contributions (AHV etc.) These come to around 10% of salary. SVA may require evidence of contracts and invoices in order to recognize the OP as self-employed.

The Swiss tax situation is that you’ll be resident in Switzerland while you live there, so you can pay tax after filling in a tax return at the end of the year (or possibly when you leave Switzerland, depending on the town you live in). The rate will depend on where you live. This tax return will just cover the time you are living in Switzerland, but the tax bands are adjusted for the part-year so it ends up similar, on a monthly basis, to living here for the full year.

The UK tax situation is that you’ll have to do a self-assessment tax return, and include your Swiss income and tax paid on the Foreign income pages (or online equivalent). You’ll get a tax credit for the tax you already paid in Switzerland, so your tax liability should be the same as if you’d been working in the UK. Some additional deductions (e.g. cost of flights) may be available but I’m not sure about those.

One other thing I am not sure about is how they'd treat the free accomodation for Swiss and UK tax purposes - it could be considered a benefit-in-kind and so added to your income at market value. Maybe best to check on that with a tax advisor (plenty are recommended elsewhere on EF).
Reply With Quote
  #6  
Old 14.03.2013, 15:26
Member
 
Join Date: Nov 2009
Location: Zürich
Posts: 151
Groaned at 1 Time in 1 Post
Thanked 79 Times in 41 Posts
big yin is considered knowledgeablebig yin is considered knowledgeablebig yin is considered knowledgeable
Re: Need help! Paying tax as a self-employed person receiving income from a UK agency

Quote:
View Post
I am confused now

So where is the original poster taxed?
UK or Switzerland?. Last answer and hmrc suggests former but the other one says Switzerland
Both.

First, they pay tax in Switzerland based on their Swiss income. Then they fill a UK self-assesment tax return and include the Swiss income and taxes paid. That might add to their UK tax bill if the Swiss effective tax rates were lower.



Quote:
View Post
We will be employing a UK maternity nurse soon. She is self employed in the UK so the last time things were simple. We pay her, she deals with the taxes Etc
Now in Switzerland I am ready to tear my hair out
Are you going to contract with her directly or pay her through an agency?
Reply With Quote
  #7  
Old 14.03.2013, 15:27
Member
 
Join Date: Nov 2009
Location: Zürich
Posts: 151
Groaned at 1 Time in 1 Post
Thanked 79 Times in 41 Posts
big yin is considered knowledgeablebig yin is considered knowledgeablebig yin is considered knowledgeable
Re: Need help! Paying tax as a self-employed person receiving income from a UK agency

Quote:
View Post
So don't worry just arrive and work. Your employer should be sorting out everything. Just make sure you're health and accident insurance are paid and then you're laughing.
Apart from the fact that the OP is self-employed, so has no employer!

The OP might want to clarify that their client is paying for their accident insurance as well as health insurance though.
Reply With Quote
  #8  
Old 14.03.2013, 15:51
Battlekitten's Avatar
Member
 
Join Date: Aug 2011
Location: Ruschlikon
Posts: 110
Groaned at 0 Times in 0 Posts
Thanked 102 Times in 47 Posts
Battlekitten is considered knowledgeableBattlekitten is considered knowledgeableBattlekitten is considered knowledgeable
Big yin

Thank you


We go through an agency but we may the nurse directly. That's how it worked in the UK too. The agencies are recruitment only I think
Reply With Quote
  #9  
Old 14.03.2013, 16:33
Member
 
Join Date: Nov 2009
Location: Zürich
Posts: 151
Groaned at 1 Time in 1 Post
Thanked 79 Times in 41 Posts
big yin is considered knowledgeablebig yin is considered knowledgeablebig yin is considered knowledgeable
Re: Need help! Paying tax as a self-employed person receiving income from a UK agency

Quote:
View Post
Big yin

Thank you


We go through an agency but we may the nurse directly. That's how it worked in the UK too. The agencies are recruitment only I think

Sorry if this is a daft question, but how long are you going to employ her for?

There are different rules for EU citizens who work in Switzerland for less than 90 days - they don't need to get residence permits, so it should be a bit simpler.
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 Rule for Married Couple with one spouse as Self Employed Redman42 Finance/banking/taxation 0 17.02.2012 15:10
Self Employed from UK but working in Geneva and Tax Dingu Permits/visas/government 3 21.01.2011 10:01
Tax related help/self employed noob2the_max Business & entrepreneur 7 13.09.2006 08:20
Tax question for married, self-employed person Humanist Business & entrepreneur 26 18.08.2006 20:15


All times are GMT +2. The time now is 04:55.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0