Crummles

I apologise if there is the information already posted somewhere but I couldn't see a specific example.

I am on assignment in the US, the company provided accomodation and a car. I continue to be paid by the UK entity of the company and taxed PAYE at home. I will have been in the US continuously for 12 months and do not hold a green card, do I have any liability?

Thanks in advance for any help,

Crummles

Pulaski

You should be paying tax and other payroll deductions based on where you work not on where you're paid. You do have a tax liability, likely a substantial one, and you should have also been paying Social Security deductions, as should your employer. You are the mirror image of the "TAX ADVICE; kinda complicated" thread that is still running.

nun

Agreed, there seem to be a lot of companies with very little understanding of the tax rules associated with crossborder employment.

As the OP has been working in the US for longer than 183 days he is US tax resident and must pay US income tax, but not necessarily FICA. he should get a full refund of any PAYE and pay income tax in the US.

Michael

Even if he was in the US shorter that 183 days, he normally is liable for US and state taxes since he is on a L1 visa and not a B1/B2 visa.

Crummles

Thanks for the responses, sounds a bit grim, can I retrospectively let HMRC know that I am not in the UK? I have been there for fewer than 25 in the last 365. Something to speak with H|R about I suppose.......

Pulaski

Yeah, in the first instance speak to HR - they effed things up by deducting taxes when they should have known that your employment was not subject to UK taxes and payroll deductions.

Michael

In the 1970's, I had a friend from the UK that setup a subsidiary in the Silicon Valley and his company did the same thing. Even though he setup payroll for local employees, he never put himself on the US payroll. About 2 years later, he was notified by his bank that the RS had subpoenaed records from his bank account. Eventually he received a big tax bill from the IRS and he immediately flew back to the UK and refused to return to the US unless the company straightened out the mess. He was authorized at company expense to hire a tax attorney and got a written guarantee that if his total tax liability including penalties (UK and US) was greater than what he already paid, the company would pay the difference so he returned.