Contracting in Sweden
Discussion
Hi folks - new here, but enjoy reading PH and hoping there are some people with the knowledge and experience to help me out on a query.
I've had an opportunity presented to me with a "well-respected OEM" in Sweden (Gothenburg) - no prizes for those able to narrow this down.
The offer is generous at first glance, though having done some digging I understand I can only use a UK registered company for 183 days, thereafter I would need to pay income tax and all the social security shebang on my entire income. If there are no alternatives to this then it's difficult for me to justify accepting the offer.
I therefore have a few questions:
Therefore is are there any legal and not entirely morally reprehensible means of reducing my taxation as a contractor in Sweden?
e.g. Is it possible to form a Swedish branch of a UK company and pay dividends (assuming dividend payments are taxed at corporation rates, and I pay myself a 'min' salary which would be taxed at standard rates) to my company?
Also, any thoughts on how best to transfer monies from one account to my UK account (legally and efficiently from a exchange perspective)?
Few bits of info:
- I'd be living 100% in Sweden (i.e. no commuting to and from UK)
- Length of contract is 6months though likelihood this would be extended to 24months every 6 months
Thanks!
I've had an opportunity presented to me with a "well-respected OEM" in Sweden (Gothenburg) - no prizes for those able to narrow this down.
The offer is generous at first glance, though having done some digging I understand I can only use a UK registered company for 183 days, thereafter I would need to pay income tax and all the social security shebang on my entire income. If there are no alternatives to this then it's difficult for me to justify accepting the offer.
I therefore have a few questions:
Therefore is are there any legal and not entirely morally reprehensible means of reducing my taxation as a contractor in Sweden?
e.g. Is it possible to form a Swedish branch of a UK company and pay dividends (assuming dividend payments are taxed at corporation rates, and I pay myself a 'min' salary which would be taxed at standard rates) to my company?
Also, any thoughts on how best to transfer monies from one account to my UK account (legally and efficiently from a exchange perspective)?
Few bits of info:
- I'd be living 100% in Sweden (i.e. no commuting to and from UK)
- Length of contract is 6months though likelihood this would be extended to 24months every 6 months
Thanks!
Go see an accountant. Loads of UK contractors work abroad, use a uk registered company, and the normal method is to pay the taxes of the country you are working in. Then you are exempt from UK tax for that period. But an accountant maybe able to set up a company the LEGALLY reduces your tax liabilty. It is/can be pretty complicated if you don't know the rules. The girls are nice in Sweden though !!!
I'm set up as a Ltd company and was working in Nigeria mnth/mnth. So if you can set up to do the same:
You will pay 20% corporation tax. there is no way of getting away from this as a Ltd company.
You are a member of staff of your company, thus so set it so you only get paid £1000 per month, this keeps you below the income tax threshold.
You then pay yourself £xx as a monthly Dividend. these are tax free (or they are until the govmnt closes the loophole).
Setting up as a sole trader or self employed is a different ball game again. get the best accountant you can afford, they are worth their weight in gold, especially come the end of year tax time.
You will pay 20% corporation tax. there is no way of getting away from this as a Ltd company.
You are a member of staff of your company, thus so set it so you only get paid £1000 per month, this keeps you below the income tax threshold.
You then pay yourself £xx as a monthly Dividend. these are tax free (or they are until the govmnt closes the loophole).
Setting up as a sole trader or self employed is a different ball game again. get the best accountant you can afford, they are worth their weight in gold, especially come the end of year tax time.
I know a contractor who got a £2000 accountant bill to sort out his tax after he came back from Holland. The annoying thing was, he's done it all correctly, it was HMRC who were complete idiots, and wanted everything verified. Wouldn't listen to him, but shut up when the accountant got involved.
Thanks for the responses folks.
It seems professional advice is a sensible step forward on this. I can see many potentially major f*ckups, not least ending up on the wrong end of either the British or Swedish tax authorities, if this is approached without a tax/relocation expert.
Any more thoughts, tips and experiences welcome...
It seems professional advice is a sensible step forward on this. I can see many potentially major f*ckups, not least ending up on the wrong end of either the British or Swedish tax authorities, if this is approached without a tax/relocation expert.
Any more thoughts, tips and experiences welcome...
It all depends on your contract. My contract is IR35 safe, which means a load of other stuff that only my accountant can understand. An accountant is the only way forward. There is soo many pitfalls and different ways to do it that there's no way to do it by going off a forum of people's opinions.
PoloStu said:
It all depends on your contract. My contract is IR35 safe, which means a load of other stuff that only my accountant can understand. An accountant is the only way forward. There is soo many pitfalls and different ways to do it that there's no way to do it by going off a forum of people's opinions.
I'll second that. It is possible that you can form a company with family members 'on the books', pay them a small low tax wage, and end up with no tax liability at all. But it's imperative you get a proffesional to set all this up for you. Of course, you could ask your local MP. They seem to know countless ways of becoming non exec directors, and squirreling money away from the tax man !!! And claiming 'strange' expenses !!!!I used PWC, they do everything; I simply fill in their local forms and they set everything up with the UK / German taxation.
I pay tax in PAYE tax in Germany, Self Assessment in the UK, yet my social security contributions count towards UK higher pension (not that its worth anything) and pay my private pension in the UK through my local payroll.
No idea how it works, but PWC helped! Although I moved from Company A UK to Company A DE.
Good luck!
I pay tax in PAYE tax in Germany, Self Assessment in the UK, yet my social security contributions count towards UK higher pension (not that its worth anything) and pay my private pension in the UK through my local payroll.
No idea how it works, but PWC helped! Although I moved from Company A UK to Company A DE.
Good luck!
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