Telecommuting and UK / US taxes
Aug 8th 2011, 6:39 pm
#1
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Joined: Jun 2011
Posts: 33
Telecommuting and UK / US taxes
OK need some input from the wealth of information you all are 
I am moving to the UK next year, I will probably be able to convince (hoping) my company to allow me to work remotely from the UK. The question then arises about how you go about paying taxes. Since I won’t be living in the US I don’t want to pay taxes (not sure if the company can just pay me gross or if they are obligated to pay Medicare and SS). In the UK do you file as self-employed? Thus you’ll start paying tax and NI contributions there. Is this done monthly?
I have read so much information about paying Social Security here and thus exempt from NI over there etc. Enough to make your head explode!
If anybody here has a similar situation or experience it would be greatly appreciated. I would assume this problem will arise more and more as technology allows us to work remotely.
Thank you all in advance!
I am moving to the UK next year, I will probably be able to convince (hoping) my company to allow me to work remotely from the UK. The question then arises about how you go about paying taxes. Since I won’t be living in the US I don’t want to pay taxes (not sure if the company can just pay me gross or if they are obligated to pay Medicare and SS). In the UK do you file as self-employed? Thus you’ll start paying tax and NI contributions there. Is this done monthly?
I have read so much information about paying Social Security here and thus exempt from NI over there etc. Enough to make your head explode!
If anybody here has a similar situation or experience it would be greatly appreciated. I would assume this problem will arise more and more as technology allows us to work remotely.
Thank you all in advance!
Aug 8th 2011, 7:15 pm
#2
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Re: Telecommuting and UK / US taxes
If you live in the UK, you will pay taxes in the UK. You will have to file taxes in the US each year but probably won't owe anything as you will get a credit for taxes you pay to the UK govt. (Some people do owe in both places so check with a US/UK tax advisor).
If your company doesn't currently have any UK employees, they may not be willing to set up a UK payroll just for you. But if they do already have a team there, it will be easy to transfer you.
If you go self-employed, then they just pay you as they would pay any other sub-contractor, and you declare your earnings in the UK. Simply register as self-employed and you're good to go. If you're self-employed, you pay taxes twice a year in July.
If your company doesn't currently have any UK employees, they may not be willing to set up a UK payroll just for you. But if they do already have a team there, it will be easy to transfer you.
If you go self-employed, then they just pay you as they would pay any other sub-contractor, and you declare your earnings in the UK. Simply register as self-employed and you're good to go. If you're self-employed, you pay taxes twice a year in July.
Aug 12th 2011, 6:05 pm
#3
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Re: Telecommuting and UK / US taxes
If you live in the UK, you will pay taxes in the UK. You will have to file taxes in the US each year but probably won't owe anything as you will get a credit for taxes you pay to the UK govt. (Some people do owe in both places so check with a US/UK tax advisor).
If your company doesn't currently have any UK employees, they may not be willing to set up a UK payroll just for you. But if they do already have a team there, it will be easy to transfer you.
If you go self-employed, then they just pay you as they would pay any other sub-contractor, and you declare your earnings in the UK. Simply register as self-employed and you're good to go. If you're self-employed, you pay taxes twice a year in July.
If your company doesn't currently have any UK employees, they may not be willing to set up a UK payroll just for you. But if they do already have a team there, it will be easy to transfer you.
If you go self-employed, then they just pay you as they would pay any other sub-contractor, and you declare your earnings in the UK. Simply register as self-employed and you're good to go. If you're self-employed, you pay taxes twice a year in July.
Aug 12th 2011, 7:06 pm
#4
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Re: Telecommuting and UK / US taxes
If you live in the UK, you will pay taxes in the UK. ......
If you go self-employed, then they just pay you as they would pay any other sub-contractor, and you declare your earnings in the UK. Simply register as self-employed and you're good to go. If you're self-employed, you pay taxes twice a year in July.
If you go self-employed, then they just pay you as they would pay any other sub-contractor, and you declare your earnings in the UK. Simply register as self-employed and you're good to go. If you're self-employed, you pay taxes twice a year in July.
I am asking, not saying......... still trying to get to grips with all of this myself...
I think this question should be asked in the US forum. The UK situation is fairly straightforward - register as self-employed, pay tax and NI contributions to HMRC, and bob's your uncle. But the evil IRS will want their pound of flesh until there's proof of overseas tax residency.
Aug 12th 2011, 10:21 pm
#5
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Re: Telecommuting and UK / US taxes
If his company has a UK branch, they could transfer him there and pay him from there. But if they don't and he wants to work remotely from the UK, I don't have the faintest idea what the company would have to do. Sorry!
Aug 12th 2011, 11:48 pm
#6
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Re: Telecommuting and UK / US taxes
If he is a contractor, the company doesn't withhold taxes from him. He is responsible for filing and paying his own taxes and the company pays him as they would pay any other vendor.
If his company has a UK branch, they could transfer him there and pay him from there. But if they don't and he wants to work remotely from the UK, I don't have the faintest idea what the company would have to do. Sorry!
If his company has a UK branch, they could transfer him there and pay him from there. But if they don't and he wants to work remotely from the UK, I don't have the faintest idea what the company would have to do. Sorry!
US tax is a bloody nightmare :curse:
Aug 13th 2011, 1:54 am
#7
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Re: Telecommuting and UK / US taxes
I can't cite anything Elvira. I am a self-employed person who will be working in the UK for US-based clients. I am working with a specialist US-UK tax company and they are the ones who will be preparing my taxes. They have prepared an analysis for me and explained my tax obligations in both countries.
As they will be filing both my US and UK taxes, they will complete whatever forms are needed. That's why I suggested the OP contact a tax advisor. The information I gave him (that he will pay tax in the UK as a self-employed person but must also file in the US - where he will likely not owe anything - is the extent of my knowledge).
As they will be filing both my US and UK taxes, they will complete whatever forms are needed. That's why I suggested the OP contact a tax advisor. The information I gave him (that he will pay tax in the UK as a self-employed person but must also file in the US - where he will likely not owe anything - is the extent of my knowledge).
Aug 14th 2011, 7:00 am
#8
Joined: Jan 2011
Posts: 88
Re: Telecommuting and UK / US taxes
sallysimmons, I am thinking of doing exactly that -- keeping my US clients and trying a stint in England. Would you mind sharing the name of the company that will help file your taxes?
Aug 14th 2011, 11:30 am
#9
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Re: Telecommuting and UK / US taxes
Sure - this was the company:
http://www.fitzgeraldandlaw.com/glob...triate-tax.htm
That's the page about ex-pat taxes but I actually spoke to this guy:
http://www.fitzgeraldandlaw.com/peop...mons-short.htm
He was so kind and generous with his time. Spent over an hour on the phone with us and didn't bill us even though we asked him to repeatedly. From the website, I get the impression that they work with many much larger clients than us (we're just my husband and I) but they treated us like royalty anyway.
They apparently also take care of VAT filing if you need them to. I asked about this since most of our clients won't be VAT eligible and he said we would probably be audited because we'd be reporting income but paying very little VAT. But he said the audit would be a simple check and once they found everything in order, there would be no problem.
Good luck!
http://www.fitzgeraldandlaw.com/glob...triate-tax.htm
That's the page about ex-pat taxes but I actually spoke to this guy:
http://www.fitzgeraldandlaw.com/peop...mons-short.htm
He was so kind and generous with his time. Spent over an hour on the phone with us and didn't bill us even though we asked him to repeatedly. From the website, I get the impression that they work with many much larger clients than us (we're just my husband and I) but they treated us like royalty anyway.
They apparently also take care of VAT filing if you need them to. I asked about this since most of our clients won't be VAT eligible and he said we would probably be audited because we'd be reporting income but paying very little VAT. But he said the audit would be a simple check and once they found everything in order, there would be no problem.
Good luck!
Aug 14th 2011, 8:21 pm
#10
Joined: Jan 2011
Posts: 88
Re: Telecommuting and UK / US taxes
Sure - this was the company:
http://www.fitzgeraldandlaw.com/glob...triate-tax.htm
That's the page about ex-pat taxes but I actually spoke to this guy:
http://www.fitzgeraldandlaw.com/peop...mons-short.htm
He was so kind and generous with his time. Spent over an hour on the phone with us and didn't bill us even though we asked him to repeatedly. From the website, I get the impression that they work with many much larger clients than us (we're just my husband and I) but they treated us like royalty anyway.
They apparently also take care of VAT filing if you need them to. I asked about this since most of our clients won't be VAT eligible and he said we would probably be audited because we'd be reporting income but paying very little VAT. But he said the audit would be a simple check and once they found everything in order, there would be no problem.
Good luck!
http://www.fitzgeraldandlaw.com/glob...triate-tax.htm
That's the page about ex-pat taxes but I actually spoke to this guy:
http://www.fitzgeraldandlaw.com/peop...mons-short.htm
He was so kind and generous with his time. Spent over an hour on the phone with us and didn't bill us even though we asked him to repeatedly. From the website, I get the impression that they work with many much larger clients than us (we're just my husband and I) but they treated us like royalty anyway.
They apparently also take care of VAT filing if you need them to. I asked about this since most of our clients won't be VAT eligible and he said we would probably be audited because we'd be reporting income but paying very little VAT. But he said the audit would be a simple check and once they found everything in order, there would be no problem.
Good luck!
Aug 14th 2011, 8:24 pm
#11
Joined: Jan 2011
Posts: 88
Re: Telecommuting and UK / US taxes
http://www.fitzgeraldandlaw.com/glob...triate-tax.htm
Wow, nice creepy funeral parlour photos!
Awesome service they offer though...
Wow, nice creepy funeral parlour photos!
Awesome service they offer though...
Aug 15th 2011, 2:57 am
#12
Senior Member
Joined: Apr 2008
Location: Manhattan
Posts: 2,913
Re: Telecommuting and UK / US taxes
If you need someone who is an expert on UK/US taxes I highly recommend Pete Newton. www.doug-tax.com
Aug 22nd 2011, 6:19 pm
#13
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Thread Starter
Joined: Jun 2011
Posts: 33
Re: Telecommuting and UK / US taxes
OK need some input from the wealth of information you all are
I am moving to the UK next year, I will probably be able to convince (hoping) my company to allow me to work remotely from the UK. The question then arises about how you go about paying taxes. Since I won’t be living in the US I don’t want to pay taxes (not sure if the company can just pay me gross or if they are obligated to pay Medicare and SS). In the UK do you file as self-employed? Thus you’ll start paying tax and NI contributions there. Is this done monthly?
I have read so much information about paying Social Security here and thus exempt from NI over there etc. Enough to make your head explode!
If anybody here has a similar situation or experience it would be greatly appreciated. I would assume this problem will arise more and more as technology allows us to work remotely.
Thank you all in advance!
I am moving to the UK next year, I will probably be able to convince (hoping) my company to allow me to work remotely from the UK. The question then arises about how you go about paying taxes. Since I won’t be living in the US I don’t want to pay taxes (not sure if the company can just pay me gross or if they are obligated to pay Medicare and SS). In the UK do you file as self-employed? Thus you’ll start paying tax and NI contributions there. Is this done monthly?
I have read so much information about paying Social Security here and thus exempt from NI over there etc. Enough to make your head explode!
If anybody here has a similar situation or experience it would be greatly appreciated. I would assume this problem will arise more and more as technology allows us to work remotely.
Thank you all in advance!
As I had understood it this is what I thought I would do: Quit as a regular employee and be transformed onto a consultant. This way no taxes are deducted in America. Since I will be a UK resident then I would pay taxes on all my earnings in the UK and file a tax return in the US claiming the allowed exemption.
Since there is a double taxation agreement I am expecting that I will only pay taxes in the UK although I'll still need to file yearly US returns as I have US nationality.
