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Old 16.10.2020, 12:52
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Tax when weekly commuting to the UK

Hi all,

I make under 120k a year in CH and currently hold a B permit. Before Covid times, I used to go to the UK every other weekend and I imagine after Covid my company is going to allow working remotely more which means more time spend in the UK for me.

Just been wondering if there any ways to reduce my taxes? Would this scenerio be counted as international commuter? if yes, how would taxes work? I've been told I would pay less taxes in Switzerland but pay more in the UK. I don't know even know how that would work after Brexit.

For the time being everything is deducted from my salary by my employer.

Thanks,

Regards.
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  #2  
Old 16.10.2020, 12:58
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Re: Tax when weekly commuting to the UK

It's pretty simple - you're resident in the UK and pay taxes there, or you're resident in CH and pay taxes here.

You can't separate residence from taxation, except partially as a cross-border commuter but I think that only applies to FR, DE and AT ?

Your company may have something to say about it as well.
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Old 16.10.2020, 13:12
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Re: Tax when weekly commuting to the UK

Have a look around on the forum, I think some have mentioned that you might end up having to file taxes in both countries?
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Old 16.10.2020, 13:13
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Re: Tax when weekly commuting to the UK

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It's pretty simple - you're resident in the UK and pay taxes there, or you're resident in CH and pay taxes here.

You can't separate residence from taxation, except partially as a cross-border commuter but I think that only applies to FR, DE and AT ?

Your company may have something to say about it as well.
Thanks. I suppose if I reside in the UK, I would still need a Swiss bank account and my salary would be paid into that account.

If that's the case, how would UK know how much I'm paid? Is it down to what I declare?
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Old 16.10.2020, 14:23
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Re: Tax when weekly commuting to the UK

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You can't separate residence from taxation, except partially as a cross-border commuter but I think that only applies to FR, DE and AT ?
EU/EFTA nationals can commute from any EU/EFTA country.
https://www.sem.admin.ch/sem/en/home...g_eu_efta.html
A cross border commuter will need a permit G.

Non EU/EFTA nationals can only commute from the "border zone" of the neighboring countries.
https://www.sem.admin.ch/sem/en/home...willigung.html

Permits held by UK nationals before December 31 2020 are protected
https://www.eda.admin.ch/dea/en/home...en/brexit.html
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Old 16.10.2020, 14:56
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Re: Tax when weekly commuting to the UK

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Thanks. I suppose if I reside in the UK, I would still need a Swiss bank account and my salary would be paid into that account.

If that's the case, how would UK know how much I'm paid? Is it down to what I declare?
UK tax is self declaration however there is exchange of info between jurisdictions.

Looks like you will have tax deducted in CH & have to pay extra tax in the UK, being credited for Swiss tax. UK does not allow commuting costs, medical insurance or Nat Insurance to be deducted, however does have a 12,500 personal allowance.
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Old 16.10.2020, 15:12
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Re: Tax when weekly commuting to the UK

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It's pretty simple - you're resident in the UK and pay taxes there, or you're resident in CH and pay taxes here.

It's actually not that simple at all. It is likely the OP will be considered a dual resident for tax purpose, but that is a decision that the tax authorities in both countries will have to agree on.
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Old 16.10.2020, 15:18
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Re: Tax when weekly commuting to the UK

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It's actually not that simple at all. It is likely the OP will be considered a dual resident for tax purpose, but that is a decision that the tax authorities in both countries will have to agree on.
Nothing for them to agree, Switzerland takes it's share, then the UK takes extra as UK taxes will likely be higher.
I would have thought you would realise UK tax is self declaration, you fill in a tax return to be compliant, nobodies permission needs to be sought.
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Old 16.10.2020, 15:39
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Re: Tax when weekly commuting to the UK

It gets complicated. Google for the UK rules on working in two different countries. Generally you pay tax where the work is done. i.e. you pay UK tax when in the UK and Swiss tax when in Switzerland, but residency, tax domicile come into it plus add in a load of other rules. Because UK is self-assessment people can and do often manage to work outside of the rules, which would be tax evasion.
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Old 16.10.2020, 15:45
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Re: Tax when weekly commuting to the UK

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It gets complicated. Google for the UK rules on working in two different countries. Generally you pay tax where the work is done. i.e. you pay UK tax when in the UK and Swiss tax when in Switzerland, but residency, tax domicile come into it plus add in a load of other rules. Because UK is self-assessment people can and do often manage to work outside of the rules, which would be tax evasion.
Tax will definitely be due where the work is done, further tax will be due in the UK if UK rates are higher than Swiss.
The OP is dual tax resident, nothing that out of the ordinary for previous full time residents
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Old 16.10.2020, 15:45
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Re: Tax when weekly commuting to the UK

Be careful what you ask for, you could end up paying taxes in both countries.
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Old 16.10.2020, 15:46
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Re: Tax when weekly commuting to the UK

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Be careful what you ask for, you could end up paying taxes in both countries.
He will almost certainly pay tax in both countries, however credit is given for tax already paid. It's the same as being tax resident in only the higher tax country.
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Old 16.10.2020, 17:22
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Re: Tax when weekly commuting to the UK

While there are the statutory rules, apparently one also has to look at the double taxation treaty. It seems one can be dual tax resident according to the rules (i.e. you would pay tax in both countries and overall the higher rate) but then 'treaty' tax resident in only one of those and thus only pay tax in one country, potentially the lower rate.


It seems this info is up to date but I'd never heard of it before.
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Old 16.10.2020, 18:18
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Re: Tax when weekly commuting to the UK

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While there are the statutory rules, apparently one also has to look at the double taxation treaty. It seems one can be dual tax resident according to the rules (i.e. you would pay tax in both countries and overall the higher rate) but then 'treaty' tax resident in only one of those and thus only pay tax in one country, potentially the lower rate.


It seems this info is up to date but I'd never heard of it before.
If only that were true, my wife runs her business out of the UK & is dual tax resident UK / Malta. UK dividends don't carry any tax credit so although only partly taxable in the UK (7.5% for base rate tax payers) they become fully taxable (or subject to a min of 5,000 Malta tax on foreign earnings not taxed or remitted to Malta) . Looks like she will spend ZERO days in the UK this year unless things change so will no longer be UK tax resident.
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Old 16.10.2020, 19:49
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Re: Tax when weekly commuting to the UK

Interesting article here
https://www.litrg.org.uk/tax-guides/...dual-residence
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Old 16.10.2020, 20:07
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Re: Tax when weekly commuting to the UK

From HMRC link in your link

"To check if your country has a double taxation agreement with the UK, go to How Double Taxation Treaties affect non-UK residents with UK income.

You can claim relief on the following types of income:

interest from bank and building societies
royalties
most work pensions
annuities'

Employment income & dividends are excluded, hence what I wrote.
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Old 16.10.2020, 20:12
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Re: Tax when weekly commuting to the UK

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Hi all,

I make under 120k a year in CH and currently hold a B permit. Before Covid times, I used to go to the UK every other weekend and I imagine after Covid my company is going to allow working remotely more which means more time spend in the UK for me.

Just been wondering if there any ways to reduce my taxes? Would this scenerio be counted as international commuter? if yes, how would taxes work? I've been told I would pay less taxes in Switzerland but pay more in the UK. I don't know even know how that would work after Brexit.

For the time being everything is deducted from my salary by my employer.

Thanks,

Regards.
How relevant is your question when there is a no deal brexit and UK planes are no longer cleared to fly in EU airspace? (and vica versa)
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Old 16.10.2020, 20:13
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Re: Tax when weekly commuting to the UK

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How relevant is your question when there is a no deal brexit and UK planes are no longer cleared to fly in EU airspace? (and vica versa)
I don't imagine there will be an issue.
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Old 17.10.2020, 18:25
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Re: Tax when weekly commuting to the UK

As others have said it depends on your tax residency status, although domicile can also play a part. Each country has clear rules in terms of time spent in country, where the work is performed etc. I would aim to adjust your actual days in Switzerland to ensure that you are only considered tax resident here, also taking into account that you do not compromise your B-permit since excessive time out of country can invalidate that.

If you are considered resident in both countries you will still need to pay Swiss health insurance in addition NHS I would guess although not sure on that.
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Old 17.10.2020, 23:41
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Re: Tax when weekly commuting to the UK

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From HMRC link in your link

"To check if your country has a double taxation agreement with the UK, go to How Double Taxation Treaties affect non-UK residents with UK income.

But as you've written already, OP will not be non-UK resident.

Rules for non-resident with UK income aren't the same rules as for UK resident with foreign income/foreign and UK income which is what the OP would be.


The section is about claiming UK tax relief on UK income as a non-resident. The fact that salary is missing means that you can't claim UK tax relief on UK salary as a non-resident and is a different concept to the OP's situation.
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