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Paying tax when working for a UK employer

Need the correct advice

post 12.Mar.2012, 09:28 PM
Post #1
Location: Norrköping
Joined: 6.Mar.2010

Ok so I am here for around 18 months to two years whilst setting up our UK office. I have my personnummer and have a bank account open. I am payed by my UK employer into my UK bank account and want to know exactly what I need to do this side regarding tax. I'm currently paying National Insurance etc back home.

I have asked the question and have three different answers so far.

First answer from Skattverket

Man betalar skatt i Sverige om man bor och arbetar i Sverige oavsett var arbetsgivaren finns. Finns arbetsgivaren registrerad hos Skatteverket så betalar arbetsgivaren preliminärskatt och socialavgifter. I annat fall ska den anställde själv månadsvis betala in dessa belopp. Den anställde fyller i såfall i en preliminär självdeklaration som lämnas/skickas in till det lokala skattekontoret. Skatteverket kommer då följaktligen att utfärda en särskild A-skattsedel med information om hur mycket ska betalas in månadsvis. Året därpå deklarerar man som vanligt och eventuell justering görs då. Jag bifogar länk till blanketten.

Basically translated

You pay tax in Sweden if you live and work in Sweden regardless of where the employer is located. Is an employer registered with the Tax Board as the employer pays provisional tax and social security contributions. Otherwise, the employee monthly pay these amounts. The employee fills probably find the moderator in a preliminary tax return submitted / sent to the local tax. Tax will therefore issue a special A-tax certificate with information about how much should be paid monthly. The following year, declare it as usual and any adjustments are then made. I am enclosing the link to the form.

Answer two from a poster on the local

When you speak with the tax office and tell them you will be seeking residency in another EU country they will give you some advise along the lines of your company paying you gross salary in UK on an NT code and you self declaring your tax in your country of residence. This seems the way it should be done although everyone i spoke to had a slightly different take on it - you do a monthly tax return in Sweden and pay them direct. Problem here is you will be paying Swedish tax levels on your UK income. The bigger problem is you will also have to pay your own social security payments so the Swedish government will be looking for 33% here. On top of your tax you could be looking at having to pay 55% of your gross salary in tax/NI, assuming your employer wont increase their current contribution of 11ish%. The bottom line is, there is no long term way round this. There is a short term solution though - there is EU legislation covering short term assingments abroad (1-2 years) that, on the principal you will be returning to your home country you can apply to continue to pay social contributions in there as opposed to you short term country of residence. That way you pay UK NI and are only liable to pay tax in Sweden. The certificate you need is called E101 and the application form is called CA3822. You can search for them on HMRC website but if you dont find them let me know and i can email them to you. I would recomend doing something like this to limit your NI burden for a while.

Thats probably an information overload so here's a few bullet points on what i would recomend you do before you leave:

Make sure you have a European health insurance card from NHS

Apply for a Nationwide flex account before you leave - free withdrawals from cash machines and decent exchange rate - i guess you will be paid into a UK bank account and as its exepnsive to transfer funds to a foreign bank this is a good way to withdraw cash

Answer 3 from HMCE

If you do have to pay UK National Insurance contributions for a period when you are working outside the UK, for particular countries HMRC will give you for a certificate which means that you will not normally have to pay contributions to the other country's social security scheme:

in a European Economic Area country, HMRC will normally give you a certificate A1 but in some cases an E101 or E102
in a country with which the UK has a Reciprocal Agreement on Social Security (except for New Zealand), HMRC will give you a certificate applicable to that country

You should apply for the certificate before you go abroad. It is possible to issue certificates retrospectively but applying as early as possible helps HMRC make the process as simple as possible for you and can prevent complications that arise if you apply for certificates a long time after the work abroad has started.

As you can imagine my head is like a whirlwind as I can't seem to see what is the correct answer. Any of you had any experience with this?

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post 12.Mar.2012, 10:33 PM
Post #2
Location: Stockholm
Joined: 17.Apr.2010

the answers are not different:
answer 1 agrees with answer 2. And is incidentally the correct way to do it.
Answer 3 refers purely to NI contributions and not to tax.
I self declare my tax in Sweden only with no tax liability in UK and use A1 E101 to continue to pay NI in UK and to have no social security liability in Sweden.

You've posted this question multiple times before - why dont you go to a tax specialist for specific help re your situation? The longer you go on the more complicated it will be to resolve...
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post 13.Mar.2012, 07:53 AM
Post #3
Location: Norrköping
Joined: 6.Mar.2010

I know and I probably sound like a broken record. My issues are that each department I speak to I keep getting different advice and it's frustrating to even try to go down one route.

I've put aside today to, as you suggested, speak to tax consultants and also have another appointment with Skatteverket tomorrow to go over it again.

Will update here for anyone else in the same boat.
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post 13.Mar.2012, 08:06 AM
Post #4
Joined: 20.Sep.2011

QUOTE (AJG @ 12.Mar.2012, 09:33 PM) *
You've posted this question multiple times before - why dont you go to a tax specialist for specific help re your situation? The longer you go on the more complicated it will be to resolve...

your company should pay for the specialist and they should have done it months ago. If it's your business then it's clearly tax deductable and you should be using an accountant yourself.

There are pros and cons to both ways of doing it, if you think you will work your 30years in the UK in total quite easily, it doesn't matter so much that you pay into Sweden's system for a while, just make sure the company increases your wages to cover the extra tax, then you don't suffer a net loss.
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post 2.May.2012, 05:06 PM
Post #5
Joined: 15.Jan.2012

with regards to the no tax liability in the UK and using the A1 E101 route, is this option available to anyone who has been living and working in the UK or do you have to be a citizen of the EU? Also, could this be used as a long term plan or is it only valid for a certain amount of time?

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post 2.May.2012, 10:41 PM
Post #6
Joined: 22.Nov.2011

In this kind of situation, it is always best to ask for a net-pay agreement with the employer before accepting to go for long periods inside another country. That way, You always know what You should receive, and anything else demanded by tax authorities etc... the employer is liable for. smile.gif

...of-course You need to factor in a slight adjustment in net pay to account for difference in cost of living wink.gif
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post 2.Aug.2012, 06:06 PM
Post #7
Joined: 1.Oct.2010

Dean did you ever get to the bottom of this? I'm in a similar-ish position.

I've been working on a project and spending most weeks in Stockholm since January. By coincidence, my wife is Swedish and I speak the language, and we've been thinking about making the move over permanently for some time. Now is the ideal time to do it.
My employer doesn't have plans to open offices in Sweden, but is open to me moving there and has mentioned working via a "PEO" agreement (Professional Employer Organisation). Does anyone have any experience of this? I've searched on google but couldn't find much useful.

Naturally I'm keen to know what the tax / NI situation is, and how best to approach it - especially if I'll need to ask for more from my employer to balance out the increased tax.
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post 2.Aug.2012, 06:13 PM
Post #8
Location: Norrköping
Joined: 6.Mar.2010


After a few months going back and forth with the HMCE in the UK I am now on Nil Tax in the UK (NT Tax Code) and my NI contributions remain the same back in the UK. In Sweden I fill out a monthly tax declaration to Skattverket and pay the required tax each month.
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post 12.Dec.2012, 06:38 PM
Post #9
Location: Stockholm
Joined: 12.Dec.2012


I'm in the same situation. Just want to make it clear, do you get gross payment from your employer, but just the NI contributions are deducted?

And also what did you do to get the NT tax code? I have contacted HMRC and they told me to to fill in Double taxation individual form, get it signed by Skatteverket and send to them. Can you shed a light on this please?

Thanks in advance.
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