ldollard

Hi All,

So I am going to be working in the UK for my US employer in a salaried position, i'll get a certain amount each month wired into my account in the UK pre-tax (gross)

I'll be paying the tax on this amount to the UK HMRC.

This is my question, I'll be paying my NI contributions, but if i worked for a UK company, I believe the UK company would have to also pay their part of my NI contributions as shown in the picture below:

I cant get the image to show in the thread so theres a link.
atk.cc/downloads/wage example.PNG

So does this mean, with me having to pay my half, that i also have to pay the employers half as well. I'll be working from home. Basically according to the example my NI amount is £274 and employers is £316.

I really hope i'm reading that wrong as that's a hell of a lot of NI contributions on £2900 a month.

Really hope someone can help.

spouse of scouse

I'll probably confuse the issue rather than help, as I only have experience of the Australian taxation system. Which must be completely at odds with that of the US if your employer pays you a salary or wages 'pre tax'. Wouldn't they be obliged to tax you at the going US rate?
Again, only from the Aus perspective - the only people to be paid pre-tax are those who work for themselves, such as contractors, self employed etc. They can contract their services to a company who will then pay them without deducting any income tax - the onus is on the contractor to declare this income to the tax authority and pay the required income tax. Also, as contractors/self employed people are not considered to be employees, the company is not obliged to pay the 9% superannuation contribution (sort of like NI in the UK)

Good luck in sorting it out, Idollard.

ldollard

In the US i'll be considered a contractor, in the UK salaried as i'll be given an exact amount each month. I'm hoping that definition is accurate anyway.

Cook_County

From a UK perspective you will be an employee and as a consequence able to benefit from all of the various rights under English law that employees have which do not exist for the self-employed. These include (but are not limited to) a written contract, paid holidays, paid maternity, parental leave, sick pay, redundancy pay and availability of pension scheme. A self-employed worker has none of these rights and has a contract for services – not one of service.

Your employer will themselves want advice on their contractual obligations, including under local employment law and whether what you do exposes them to any UK tax issues.

Panhandle

I think there is also a new pension contribution that the employer has to pay.

I dont know much about it but here is a link:


http://www.thepensionsregulator.gov.uk/employers.aspx

nun

If you have moved from the US to the UK to work for this US company and you were previously paying FICA you can apply to the SSA for a certificate of coverage and you and your employer can continue to pay FICA and can be exempted from NI.

However, you current situation is definitely not correct. You should talk to your employer and make sure they employ you correctly according to UK law and fullfill all their obligations, so holidays, NI/SS payments, pension etc or you need to become self employed and bill the company for your services with appropriate overhead for NI, pension etc.

ldollard

thanks, it seems that i'll need to be self employed.

As a self employed person, i'm assuming I have the same health or pension rights as a regular salaried person as long as i'm paying into all that?

Or do i have a choice to not even pay into NI?

englishguygoinghome

Health, yes that's not contribution related in the UK. Rest of NI - there are some weird rules you need to read up on.

Also there is a law regarding self employed people who only work for one employer which lead to NI complications.

Most importantly based on your previous posts: the rules for sponsoring a spouse are subtly but very importantly different. I think you'd have to wait till you were in country for 6 months before applying.

petrichor

Idollard, you need to have a thorough read of this: http://www.hmrc.gov.uk/selfemployed/

Do be aware that while you might register yourself as self-employed, HMRC may still decide to treat you as employed, especially if you work long term for only one company.

spouse of scouse

It may be a bit naive of me Idollard, but I would have thought your employer would have put some effort into determining how the move would affect their and your tax status etc. They don't seem to have done any research at all

johnh009

If you are working in the UK for a foreign company, the company must register with the HMRC as an employer and pay the tax and National Insurance due by deducting these from your salary, plus paying their own contributions. You will then be required to complete a tax return each year. Best take professional advice, it can be a complicated situation.

If your business is generating an income in the UK, you could consider incorporating.

nun

They would also have to comply with other UK employment laws for holidays, pensions etc etc.

johnh009

Yes or there will be a lot of fines flying around. Probably the only way around this is if the OP comes over for short periods of time and retains residency in the US.

holly_1948

I'm not a lawyer, and haven't even studied English law (only American).
But I but I believe that rule about self-employed people who have only one client only applies if the client is in the EU.
Not if the self-employed person is (technically) exclusively in the worldwide export business.

However, I get the impression that the OP's company has not taken appropriate legal advice on having a representative resident in (versus frequently visiting) a customer country overseas. And they need to.
It may be best that they have the OP reside in the US, even though present there briefly a few times each year. You can rent a pied-a-terre very cheaply stateside if you don't need a place that is tolerable to live in longer than the odd day at a time.

Either the OP must continue legal residence stateside or there has to be a legal business entity in the UK. It could either be owned by the OP (slef employed) or by the stateside putative employer (limited company). Professional legal and accounting advice is vital either way.

nun

The simplest solution is for the OP to become a contractor and bill the US company for here services with something like 50% to 100% overhead to cover NI, her pension and other costs. So take whatever hourly rate you get now and double it. There are companies set up specifically for this. They will bill the US company and deal with all the payroll/NI stuff for you for a fee.