denton_f

Hello all,

I am a UK citizen working full-time in the UK and paying UK tax via PAYE. I am also doing the occassional freelance work for a US-based firm. I happen to have a US bank account and Social Security number from spending some time in the US years ago.

My question is this: instead of having my freelance fees wired to my UK bank account and declaring to HMRC, would there be a benefit tax-wise to having them placed into my US account and leaving them there until I return to the US at some point down the line.

Does anybody know what the tax implications of this set-up might be?

Many thanks!

Rete

Others will chirp in shortly. My first thought is do you have work authorization for the US? If you are being paid by a US company, even though you are working remotely, I would think you need USCIS work authorization especially if you are being paid by the company directly and into a US bank account.

I would also assume that since you are earning money in the US you would be liable to complete a tax return annually.

Owen778

I don't understand. Why do you think that?
I'm not sure that's automatically true either, though I'm less familiar with US taxation of US-derived income for non-resident aliens.

To answer the OP's actual question: There is no tax implication to when you convert the currrency, since the income tax is owed when you are paid, not when you convert the USD to GBP. There is a small tax implication, at least for US taxation (I don't know about UK), if you have a capital gain by waiting and then getting a better currency conversion rate than you would have done by immediate conversion.

hungryhorace

Wrong.

You only need work authorisation if you are working physically in the United States.

Rete

Thank you both. That is why someone will be long shortly.


TA

teejaydee

Not declaring part of your income to HMRC amounts to tax evasion. You are tax resident in the UK and must declare your total worldwide earnings to HMRC. You have to pay UK tax on all your income. You can't pick and choose what proportion of your income you pay tax on.