Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

UK Citizen moving to the US tax advice

UK Citizen moving to the US tax advice

Old Nov 14th 2023, 8:30 am
  #1  
GLB
Just Joined
Thread Starter
 
Joined: Nov 2009
Posts: 17
GLB is an unknown quantity at this point
Default UK Citizen moving to the US tax advice

Can anyone offer some broad advice?

We are moving to the US next year (Arizona). My wife and son are American (and UK citizens) and we all live here in the UK. I'm filing for a green card from here.

If I am to work remote from the US for my current UK company (small co and they are fine with it), I'm assuming I will pay US taxes on my income and not UK? Or alternatively could I set up a LLC in the US and invoice my UK employer for my time for which then i pay US taxes?

Also, we are going to rent our UK home out, will the rental income be subject to just US taxes and not UK?
GLB is offline  
Old Nov 14th 2023, 8:44 am
  #2  
Forum Regular
 
Joined: Apr 2012
Location: London
Posts: 162
Trailing_Hubby will become famous soon enough
Default Re: UK Citizen moving to the US tax advice

I don't know how the job part of it will work - depends if it counts as UK income, I guess. Rental income is UK income so will be subject to UK taxes though.
Trailing_Hubby is offline  
Old Nov 14th 2023, 3:36 pm
  #3  
Lost in BE Cyberspace
 
Joined: May 2010
Location: San Diego, California
Posts: 9,644
SanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond repute
Default Re: UK Citizen moving to the US tax advice

If your UK employer does not have a presence in the US in order to put you onto the payroll, then you will go self employed and bill them for your time, when working in the US.
Yes, you will pay tax on your employment income in the US; also your rental income.
You need to inform HMRC that you are leaving the UK in order to get an NT code.
SanDiegogirl is offline  
Old Nov 14th 2023, 9:15 pm
  #4  
Furby
 
Glasgow Girl's Avatar
 
Joined: Apr 2016
Location: St. Louis, MO.
Posts: 868
Glasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond repute
Default Re: UK Citizen moving to the US tax advice

To remain employed by a UK company performing work physically in the US, the UK employer would legally need to pay US payroll taxes (tax, social security and Medicare) which means them setting up an arrangement with someone who provides US payroll services, likely to be financially prohibitive for a small company. If they do not do so, the responsibility becomes yours and you would be breaking laws if you do not do so. The alternative is for you to invoice them for services effectively terminating your employment and becoming a contractor. You can invoice in the UK in pounds and use a UK bank account. That saves them the hassle and expense of organizing US payroll services because you now manage your own payroll. You would report your earnings directly to the IRS, and will have to pay 12.4% social security and 2.9% Medicare taxes directly to the appropriate agencies. Income tax would be paid to the IRS not HMRC. Most people would gross up their hourly rate to cover these expenses but that is a tough sell to your current employer when these expenses are not of their doing. In any case they are not much more than the NI rate so perhaps you just take that as a wash. I would gross up the hourly rate to take into account any benefits you may lose, primarily paid holidays that would no longer be available to you.

The US payroll taxes won’t be hard to figure out, a learning curve but straightforward after that. If you operate as a sole proprietor I don’t think you need to set up any entity, just report your income annually using the normal (US) 1040 form. You do however have to pay estimated taxes on a quarterly basis but you can research all of that fairly easily by googling sole proprietorship. Of course you will need a green card, visa or employment authorization document to physically perform work in the US.

Your UK rental income will be taxed first by the UK but will also be subject to US taxes. The US will provide credit for any tax paid to the UK and you will only have to pay any difference between the two taxes to the US. If the UK tax is less than the US tax then there is no refund.Either way be sure to report the income because failing to report foreign income is a very big deal.
Glasgow Girl is offline  
Old Nov 14th 2023, 9:32 pm
  #5  
Deep in the woods of CT
 
Nutmegger's Avatar
 
Joined: Feb 2010
Posts: 7,002
Nutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond reputeNutmegger has a reputation beyond repute
Default Re: UK Citizen moving to the US tax advice

Originally Posted by Glasgow Girl
You can invoice in the UK in pounds and use a UK bank account.
I bill clients in various European countries in dollars and provide the banking info so that the payment can be wired directly into my US account in dollars, thus no extra steps necessary to transfer. However, I should point out that my bank account does not charge me for incoming wires.
Nutmegger is offline  
Old Nov 15th 2023, 4:45 pm
  #6  
BE Enthusiast
 
newadventure's Avatar
 
Joined: Jun 2011
Posts: 388
newadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond repute
Default Re: UK Citizen moving to the US tax advice

Further to GlasgowGirl's post, we use an online payroll service in the US which charges $76 per month (6 employees)
newadventure is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.