Advice on "employment" with USA-based company

[TheCyclingProgrammer]

If you think you might have to travel to the USA for work (eventually!), this might also affect how you structure your relationship. You might want to think about what you'd say to the CBP officer when they ask about the purpose of your trip to the USA. Turning up to "do some work" for an American company, if you don't have the correct visa, is a non-starter. And I'm not an expert but I don't know how they would sponsor you for a visa if you're working via some intermediary.

If you're contracting through your own Ltd, it's much easier to present yourself as travelling for "meetings with clients" without any visa hassles.

I have no plans to travel to the US to work so no worries there.

[TheCyclingProgrammer]

I really don’t see how this could be inside IR35 given the far more clearcut AB5 rule in CA and the difficulty in enforcing SDC, in practice, but you should get it reviewed.

I also don’t really see the problem with the DPNI scheme. It isn’t the CA company that manages this, it’s you. The advantage is employment without ErNI and also no problem w/r to MVL.

Still, it sounds like you’re going the contract route to begin with. Best of luck. You may want to purchase some forward contracts for GBP in USD to reduce currency risk. They may ask for a W8-BEN-E. Insurance should be simple with UK jurisdiction and governing law of E&W.

If I’m going down the contract route I’d just feel more comfortable doing it properly. I am generally quite risk averse.

Agree about the DPNI scheme but I guess from their perspective it’s not just about payroll but also having proper employment contracts in place that reflect U.K. employment rules and that’s what services like Remote.com. They’re small and they’re legal team is tied up with other business right now which is why it’s not happening now.

I just need to ensure that when the perm role begins that the salary offered is still the same gross after employers NIC and that they don’t try to reduce it to compensate. On the plus side I will have U.K. employment rights, a proper contract and should hopefully be able to agree a salary in GBP too. Should make it easier to get the pension sorted as an employer contribution/salary sacrifice.

[dpilch]

This sounds a lot like the company I am engaged with in the USA.

I have had my contract reviewed via QDOS recently. I had some ammendments changed in the contract but overall they have deemed the as outside IR35.

Most definitely get your own contract checked and good luck.

[jamesbrown]

I just need to ensure that when the perm role begins that the salary offered is still the same gross after employers NIC and that they don’t try to reduce it to compensate. On the plus side I will have U.K. employment rights, a proper contract and should hopefully be able to agree a salary in GBP too. Should make it easier to get the pension sorted as an employer contribution/salary sacrifice.

Do they really know what they're getting themselves into there, having an employee based in the UK? There is the PE risk (probably fine if you cannot bind the non-resident company) and other risks. Seems super weird to me that they wouldn't want to treat you as an independent consultant on their end. That way, you have complete flexibility on how you want to treat the income on your end, subject to the reality of the working practices. You could choose to use the DPNI scheme (e.g., if you don't like the IR35 risk and also want to MVL) or you could choose to run it through a company (OK, that would impact the contract) or umbrella or self-employed. But you may want the employment rights, in which case you may have to pay the employment costs, including theirs. I'd be surprised if they offered you a pay rise equivalent to ErNI, but you might want to sound them out on that upfront.

[TheCyclingProgrammer]

I think the reality is that they want to treat their employees like employees, not independent consultants. That requires either setting up a permanent establishment or using a service like Remote.com or LetsDeel and I think more and more remote-first tech companies will start moving in this direction.

Let’s face it, in the tech world in particular, the days of just looking to hire from your existing base are over. Remote first companies are going to become more and more prevalent. It’s only right IMO that they hire people correctly and those employees are afforded the rights they are entitled to and taxed correctly in their jurisdiction.

I’m surely they are fully aware of the PE risks but as you say this is unlikely to be an issue so long as the employees have no real authority to conduct business on behalf of their employer.

From my own personal perspective, I made a decision to return to a perm role as I felt it was the right move for my career. I don’t want some weird hybrid employee/contractor relationship. I’m ready to leave that world behind for now.