magwhyte

Hi Everyone:

I have been a bit of a 'lurker' on these forums for a couple of years (I had nothing to contribute due to the quality of the answers already given), but now find myself needing some insights and some ideas on who I might need to talk to, etc.

My wife and I (wife = US citizen/myself = dual US/UK with right of abode) are both licensed healthcare providers in the USA and have decided to take advantage of the freedoms that providing Telehealth services affords to us. Namely we move back to the UK to be closer to family and with a trip or two every 18 months to take US continuing education credits, we can continue to work and earn income in US dollars.

We have been researching and it appears that as long as we only work online with patients residing in the states in which we are licensed (i.e. no practice with any form of UK resident, etc.) we are fine.

However, we would be living in the UK, but working and being paid into our US checking account. Business expenses would be paid from that US checking account to US vendors, but our 'draw' or 'salary' would then be sent to a UK chequing account.

I am assuming under the provisions of the Double Taxation Treaty that that would be the amount we owe UK taxes on. Is that correct? What if we each brought to the UK the dollar equivalent of 45,000 pounds sterling (20% basic income tax rate) and leave some US dollars in the US checking account. Is that permissible or would it attract penalties or scrutiny from either the IRS or HMRC?

If this is too much of a request for this forum. Who would you recommend I speak to and what would the typical cost for a consultation be, etc?

Many thanks for any insights you can offer.

Adrian...

Pulaski

Under both US and UK tax law you must pay taxes, and SS/NI based on where you are physically located while performing the work. So if you are in the UK you will owe no US income tax or SS contributions, but must pay income tax and NI in the UK.

magwhyte

Thank you, Pulaski. That would be my understanding, so I really appreciate you taking the time.

What do you think about leaving funds in the US? From your answer, I can see that I would still owe UK taxes in that situation. Would you agree?

Again, thanks.

Pulaski

Yes, if you are living and working in the UK you are taxed in the UK on your global income irrespective of whether or not you remit the funds to the UK.

SanDiegogirl

Presuming that you are applying for a spouse visa for your wife,I presume you are applying under the self employment category.

Would this not mean registering your company as per the following requirements taken from Appendix FM 1.7 and providing all necessary documentation to show ongoing self employment?

8A. In respect of prospective self-employment in the UK (for an applicant’s partner or parent’s partner who, in respect of paragraph E-ECP.3.2.(a) or E-ECC.2.2.(a) of Appendix FM, is in self-employment outside the UK at the date of application and is returning to the UK to continue that self-employment), one of the following must be provided, with a starting date within three months of the person’s return to the UK:
(a) An application to the appropriate authority for a licence to trade;
(b) Details of the purchase or rental of business premises;
(c) A signed employment contract or a signed contract for the provision of services; or
(d) A partnership or franchise agreement signed by the relevant parties to the agreement.

magwhyte

Thank you, Pulaski. That makes it much simpler for me to get my head around. Really appreciate your assistance.

magwhyte

Thanks, SanDiegogirl for replying.

1. Our intention is to apply under one of two options. The first is savings, which we should have enough of by the time we get around to applying for the spousal visa. The other option is that my spouse is a 100% disabled US veteran after her spine was badly damaged while working as a nurse in the US Army. Another 100% disabled US veteran recently moved to the Bath area and the monthly disability payments were considered a pension and the amount was more than enough to meet the minimum income requirements for him to qualify under the income criteria. Accordingly, he was given a spousal visa. Hopefully, if we are short on the savings that would be the means for my spouse to qualify for her spousal visa.

2. I can see your point about registering a company and it makes sense. However, and this is where I hope I am right, neither of us will be providing services in the UK but in the US. So, at first blush I don't see a reason to register a company in the UK, I just want to bring the net income and be taxed upon it in the UK. I realize that working via the Internet is still a bit of new thing, especially in relations to healthcare. What I am hoping is that the patient is in the USA and that would count, for all intents and purposes, for the billable service to be considered as an integral aspect of self-employment in the USA.

This is an important issue for us to resolve. I hope that the IRS will be happy that we are spending money with US vendors, and the HMRC will be thrilled to receive the taxes.

Or am I dreaming? :-)

Ozzidoc

Working in the UK as a UK licensed health professional, right?

magwhyte

Hi Ozzidoc:

Negative. In the USA using Telehealth with patients who are resident in the states in which we are licensed. No-one outside of those states would receive services. Simply due to licensure restrictions across state lines and the insurance contracts only pay for patients who see their providers in those states (either office-based or via telehealth services).

SanDiegogirl

1. Yes, ongoing disability payments can be used to meet financial requirements for a settlement visa

2. How do you, in practice, prove net income and bring it into the UK to be taxed as income for self employment if no company is present in the UK? You could, theoretically, state no income from your company in the States and therefore pay no taxes in the UK - and yet you would be partaking of all UK benefits and resources.

magwhyte

Hi SanDiegogirl,

Thank you for confirming #1. Much appreciated.

Regarding #2, I guess you have found a good use for the Washington State Business and Occupation tax. It's based on 0.015% of gross income. It doesn't matter if you make a profit or a loss. Most businesses hate the tax, but I think I can show HMRC the submitted documentation and tax receipt and that might be the proof.

Thank you. This is really helpful.

Adrian...

Cape Blue

I thought USCs were taxed on their income by the IRS regardless of where they live? I.e. in this instance the UK get's first dibs but they would still need to file a US tax return (albeit with likely zero tax to pay as already paid more in the UK)?

magwhyte

Hi Cape Blue:

My understanding is you are correct. I would intend to file a US Income Tax Return but claim under the Double Taxation Treaty to avoid actually paying taxes in dollars, but rather in pounds sterling, due to being habitually resident in the UK.

Cheers!

Adrian... :-)

Pulaski

Yes, that is correct, and as you said, the UK gets "first dibs". .... But for SS and NI, that is purely location based - US citizens don't, and indeed can't contribute to SS when they are living and working outside the US.

Cape Blue

I seem to remember the filing with FATCA, FBAR, property in Spain and let property in the UK with pension funds in the UK and so-on being a little challenging.