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Self Employed in the US and getting paid in the UK

Self Employed in the US and getting paid in the UK

Old May 4th 2020, 9:50 pm
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Default Self Employed in the US and getting paid in the UK

Dear All,

I have recently moved to Houston TX due to my husband relocation and I have a bunch of questions I hope somebody can help.

I am looking to set myself up as a freelancer here in the US ( paying US taxes) but working primarily for my ex employer back in the UK as consultant instead as employee . I will be paid in GBP - Does anyone know what is the best way to handle this transaction? Would it be better for my UK employer to pay me in my UK bank account and then transfer the money with Tranferwise/ revolut etc.( I OR should I get paid in my US bank account and potentially loose money in transfer fees?
Thank you very much - any advise will be much appreciated
Barbara
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Old May 4th 2020, 9:57 pm
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Default Re: Self Employed in the US and getting paid in the UK

first question - what's your visa?
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Old May 4th 2020, 10:01 pm
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Default Re: Self Employed in the US and getting paid in the UK

Hi ! I am on an E2 spouse visa - My EAD card is on its way - After it arrives I will need to start the process to set myself up as self-employed ( advise on this will also be welcome)
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Old May 4th 2020, 10:07 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by BarbaraB View Post
Would it be better for my UK employer to pay me in my UK bank account and then transfer the money with Tranferwise/ revolut etc.( I OR should I get paid in my US bank account and potentially loose money in transfer fees?

Barbara
One other point to consider if you are paid directly into your US bank account, you have no control over the exchange rate. You get what it is when they pay you. If paid into a UK account you do have some control as you can move the money when you want to, and pick the exchange rate.
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Old May 4th 2020, 10:18 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by lansbury View Post
One other point to consider if you are paid directly into your US bank account, you have no control over the exchange rate. You get what it is when they pay you. If paid into a UK account you do have some control as you can move the money when you want to, and pick the exchange rate.
Thank you that's exactly my worries. I just wondered if there were any restrictions or any downsides to this
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Old May 4th 2020, 11:35 pm
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Default Re: Self Employed in the US and getting paid in the UK

Or could you bill them in USD and have them ride the currency wave?
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Old May 4th 2020, 11:39 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by tom169 View Post
Or could you bill them in USD and have them ride the currency wave?

Exactly what I do for my overseas clients. Most are also able to wire to me without fees (I have no fees from my bank at this end) and for those who do take a fee, I build it into my bill. OP, if you search the forum, you will find a few threads on the topic of being self employed in the US with international billing.
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Old May 4th 2020, 11:39 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by tom169 View Post
Or could you bill them in USD and have them ride the currency wave?
unfortunately that's not an option ..
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Old May 5th 2020, 12:35 am
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by BarbaraB View Post
unfortunately that's not an option ..
well, I'd push back on that one. If they are prepared to pay directly into your US bank account then simply agree an hourly rate in US$ with them that suits you both. It could be just an average of the exchange rate of last year or whatever.

If not, I would increase the hourly rate in UKP to incorporate an exchange rate buffer and also the bank charges.
I would also have it paid directly into my US business bank account - don't forget that bank fees for this are tax deductible items.
I'm assuming you've also figured out how much social security and tax you are going to have to pay?

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Old May 5th 2020, 2:41 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by petitefrancaise View Post
well, I'd push back on that one. If they are prepared to pay directly into your US bank account then simply agree an hourly rate in US$ with them that suits you both. It could be just an average of the exchange rate of last year or whatever.

If not, I would increase the hourly rate in UKP to incorporate an exchange rate buffer and also the bank charges.
I would also have it paid directly into my US business bank account - don't forget that bank fees for this are tax deductible items.
I'm assuming you've also figured out how much social security and tax you are going to have to pay?
That's a really good idea actually Thank you very much for your suggestion- I am going see if we can agree on an $ rate based on average exchange rate - In regards to social security and tax.. I am still look into it - I will set 20% to stay on the safe site . I initially thought I had to register as a business but the more I am reading the more I have come to the conclusion I may not need to do it and just stay as a freelancer. -do you have any suggestions or do you know of any legal requirements whereby i need to set myself up as Sole Proprietor ? Was also planning to invoice using Quickbooks or similar - Thank you again !
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Old May 5th 2020, 4:05 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by BarbaraB View Post
That's a really good idea actually Thank you very much for your suggestion- I am going see if we can agree on an $ rate based on average exchange rate - In regards to social security and tax.. I am still look into it - I will set 20% to stay on the safe site . I initially thought I had to register as a business but the more I am reading the more I have come to the conclusion I may not need to do it and just stay as a freelancer. -do you have any suggestions or do you know of any legal requirements whereby i need to set myself up as Sole Proprietor ? Was also planning to invoice using Quickbooks or similar - Thank you again !
I work as an independent contractor and have no necessity for any kind of formal business entity; I do the work, and I bill! Others have said that they have used an S Corporation or similar, but it probably depends on what you do.
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Old May 5th 2020, 6:40 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by Nutmegger View Post
I work as an independent contractor and have no necessity for any kind of formal business entity; I do the work, and I bill! Others have said that they have used an S Corporation or similar, but it probably depends on what you do.
Totally depends on what you're doing. The main reason for setting up a business entity is to provide legal separation between you ( and your assets) and the business. If your client is in the UK, you're unlikely to get sued in the USA so there's probably no reason for you to do this.

You need to set up as a "doing business as" (DBA) in Texas.

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Old May 5th 2020, 6:55 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by petitefrancaise View Post

You need to set up as a "doing business as" (DBA) in Texas.

To clarify for the OP, presumably only if you are working under an entity other than solely your actual name?
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Old May 5th 2020, 7:42 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by Nutmegger View Post
To clarify for the OP, presumably only if you are working under an entity other than solely your actual name?
NO, in Texas, a sole proprietor must also file a DBA.
Start A Business
It also stops other people using your name for their business
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Old May 5th 2020, 8:04 pm
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Default Re: Self Employed in the US and getting paid in the UK

Originally Posted by BarbaraB View Post
Thank you that's exactly my worries. I just wondered if there were any restrictions or any downsides to this
There are no restrictions on doing that, other than having more than $10,000 in UK accounts which then have to be reported. Info here https://www.irs.gov/businesses/small...-accounts-fbar While it says businesses it applies to individuals too.

Downside is you wait to move the money and the rate drops, and you either have to wait for it to come back up or take a loss. For most people it isn't huge sums, but I receive several hundred extra dollars a year doing the transfers myself.
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