mattny

I have been living abroad (New York) for a few years, married and working here. And each year I complete the UK tax return and file the abbreviated accounts for a Ltd. company I have there.

The paperwork is starting to make me drown because I also have the stuff to file in the US (including another small business). i'm ready to close the UK business but that will have me as earning 0 there, and I'm unsure about taxes, NI and filing a zero self assessment.

I'm wondering if anyone can help me understand about pensions/NI contributions and tax implications as I'm planning on closing the business but am not sure if I have to continue the yearly self assessment and the weekly NI contributions I've been making (or if I'm even allowed to continue those - I think they're £2.50/week).

Also do I have to report my US income in the UK?
Do I register as a non-resident?

Many thanks for any help in starting to understand all this.

Bob

If you aren't resident in the UK, you should have filed a P-85.

NIC's, you can continue to make voluntary contributions, the pro/cons all depend on age and how close to retirement, there have been a few threads that go over that, so if you search them out you'll get some ideas.

No idea about the business front, but if you have no earnings in the UK, no property etc, then you wouldn't need to file any UK selfassement, but then things might change in April, so who knows.

Might be worth having a tax accountant to consult with, Peter Newton, who is a BE member has been recommended quite a lot and he ins NY based, you can probably find his details easily enough.

Welcome to BE too

penguinbar

I use Pete Newton. He helped us with my husbands UK tax returns and he has been doing our US tax returns for the past few years. I highly recommend him.

Here's Pete's info.

www.britishexpatstax.com

Steve_

Uh oh - years? On that basis you are resident in the US for tax purposes.

You already earn zero there technically speaking if you do the work from the US, because you're in the US - you're earning it in the US. It maybe UK-source income and it maybe subject to UK taxes, but that means you have to file for a foreign tax credit in the US (Form 1116) and pay US income taxes on that income. Where are you physically when you perform the work for the UK company?

I don't know how reporting UK taxes work as a non-resident but certainly HMRC should be aware of the fact that you are non-resident. Which you do by filing a P85. You should also notify any UK financial institutions you have accounts with that you are non-resident on R105.

Well either way they're Class 2 NI contributions so it's the same money - but from the sounds of it you're in a mess with income taxes. If you are self-employed in the UK or employed abroad, you pay Class 2 NI. If you are abroad it is voluntary.

No, other way around - except of course if you never told HMRC you are non-resident.

You are in a serious mess if you've waited this long to tell HMRC you're non-resident, seek professional advice. You should have been paying US income taxes on that income. Moreover if you've been earning in the US and never told HMRC you were non-resident, you should have been paying UK income taxes on your US income - i.e. dual taxation. Which is why it's so important to tell HMRC you are non-resident and declare the UK income to the IRS and claim a foreign tax credit (if the UK-source income is subject to UK taxes which it would be if you were physically present in the UK doing the work).

You're not clear on how much time you spend in the UK - HMRC has completely different residency rules to the US.

You need to establish where you are resident for tax purposes (bearing in mind the US also taxes US citizens and LPRs wherever they live).

However if you meet the substantial presence test then you are resident in the US for tax purposes, read IRS publication 519, or 54 as applicable.