Swiss companies with employees based in the UK have to deal with the UK payroll. This is relatively easy with the support of specialized payroll providers.

In addition to the UK payroll, the so-called P11D forms must also be completed in most cases. These forms record the monetary benefits and fringe benefits received by the employee during the UK tax year, on which the corresponding taxes are paid.

Case study

A Swiss company has 3 employees in the UK. They are employed by a Swiss company. However, the employment contracts are governed by UK law and the UK payroll is handled with the help of international payroll providers.

Aware of the complexity of the employment, the employment terms and benefits were intentionally kept simple. Employees receive an annual bonus in addition to their monthly salary. The expenses for the foreign home office in the UK have so far been reimbursed by the Swiss company via the regular Swiss expense report.


What needs to be considered in this case concerning P11D forms?

Possible solutions

In the annual review of whether the P11D tax forms need to be prepared at all due to benefits and non-cash salary components not included on the payroll, extensive information is required. For example, it is necessary to find out which benefits are granted by the employer. This includes, for example, company outings or the sporadic use of company cars.

In the present case, the employees in the UK can only claim business-related expenses and do not receive any other salary components or fringe benefits apart from their salary and bonus. The preparations for the P11D forms are thus completed relatively quickly.

However, it turned out that the business-related Internet and telephone expenses for the UK home office were not visible on the UK payroll, but were only reimbursed via the Swiss employer's expense portal.

This meant that despite the clear and straightforward compensation structure, P11D forms had to be prepared for employees in the UK and the appropriate taxes paid on these. Annoying, but unavoidable.

To ensure full compliance with UK payroll and tax requirements, business-related internet and telephone expenses will in the future be reimbursed via the UK payroll and no longer via the Swiss expense tool.

This should also avoid P11D filing in the next UK tax year while maintaining the same compensation structure. Whether this can then actually be avoided will again be queried in the following year with an extensive questionnaire on fringe benefits. However, the chances of avoiding P11Ds in the present case are good due to the simple compensation structure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.