goldenstate31

http://answers.google.com/answers/th...id/745605.html

nun

The link you provide is a good initial analysis of the situation for someone working in the UK for a US company. It's out of date being from 2006 and isn'y for the situation of someone going from the UK to work in the US......which I thought was your situation.

goldenstate31

I was referring to the links. My bad. Anyhow I was just pointing out the avoidance of double taxation. Which I think was the op's original query.

Michael

True, there are generally double taxation agreements but I had a friend from the UK that had setup a subsidiary and was being paid from the UK company and paid UK taxes. Although he setup a US payroll for his employees, he never put himself on that payroll. Three years later, he received a very large tax bill (including penalties and interest) from the IRS.

As far as the IRS was concerned, he owed US taxes since he worked in the US and he had to try to get refunds from the UK government.

nun

Sounds like he'd paid the UK in error and the US was correctly applying the rules as the primary taxing authority in that case.

You have to make sure you pay the right country the full amount of tax and then get credit for that tax in the other country. It's not that difficult with income taxes, basically your residence country must be paid in full. The situation gets more complicated for dividends and capital gains as there are certain minimum taxes to be paid according to where the funds reside. Cross border taxation will generally lead to you paying the larger of the tax bills you'd have in either country, but you must work out the proportion of those taxes that go to each country.

Steve_

Sigh, read IRS publication 519.

You can't be employed by a UK employer unless they have a payroll in the US and are doing all the withholding etc.

The usual thing to do in this situation is to either start your own company and invoice them or be self-employed and invoice them.

Visionxq2

I worked from home to phone the tax office at the US embassy London today and they are closed for Washington birthday. Fair enough; but I live and work in Enland and the tax office phone machine doesn't take messages and they don't have an email address to get in contact with them. Day wasted.

Frustrated American living in England!