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HELP! Working for US, LLC as UK based Contractor

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    HELP! Working for US, LLC as UK based Contractor

    Moved from General…

    Originally posted by Jonty789 View Post
    Hi all,

    I'm going to be doing a contracting job for a US company (an LLC based in Delaware) with no presence in the UK. I am based (tax resident) in UK.

    They have drawn up a contractual agreement and the pay will be above 100k GBP (above 130k USD) in a tax year

    What's the best way to structure this please? my first thought was an umbrella but the US company don't seem amenable as contract is to be governed by US law.

    I'm frankly looking for a straightforward solution, not trying to avoid tax etc. As long as it doesn't get silly where I get double taxed/triple taxes etc.

    I assume if setup a UK limited or sole trader I will then have to invoice VAT? Again something the firm won't pay.
    What about setting up a Delaware LLC and then paying some dividends to me personally in the UK?

    Feels pretty messy, would be grateful for all your help.

    Jonty
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    #2
    Here's a similar discussion, which might be useful:
    Help! Contracting with US company while in UK - Contractor UK Bulletin Board

    If you (Jonty789) have a read through that, you can then come back with any follow-up questions.

    Comment


      #3
      I see hobnob linked a relevant thread. On VAT, this will be determined by the VAT place of supply rules, assuming you don’t go with an umbrella employment (in which case it is irrelevant). Where the supply is B2B and enjoyed in the US (and not customers in the UK), then your invoices will be outside of the scope of UK VAT and your invoices will clearly note this (“outside of the scope of UK VAT”) with no VAT added. This is the most likely outcome.

      Comment


        #4
        OP, I suggest you sort out the professional indemnity and public liability insurance side of things as a priority. It could be a shock how much it costs, if you can get cover for a US contract. You don't want to do work for a potentially litigious client without good insurance cover. Assuming the contract is governed by US law.
        Public Service Posting by the BBC - Bloggs Bulls**t Corp.
        Officially CUK certified - Thick as f**k.

        Comment


          #5
          This is extremely helpful, thank you very much all for your timely responses.

          So a simple way seems to be to setup a sole trader in the UK and then invoice clearly stating there is no VAT.

          A few questions that follow, assuming i setup as a sole trader
          1) W-8BEN (as an individual) is the form I will need to fill in and give to the US company?
          2) I assume given the amounts involved, I will need to register for VAT given the turnover in UK? Although this contractor arrangement is outside VAT (given what we discussed)
          3) Will I be ok to invoice in dollars? Am I also allowed to claim some expenses as a sole trader?

          Thanks
          Jonty

          Comment


            #6
            Do not work for an American firm without a limited liability entity between you and the client
            merely at clientco for the entertainment

            Comment


              #7
              Originally posted by Jonty789 View Post
              This is extremely helpful, thank you very much all for your timely responses.

              So a simple way seems to be to setup a sole trader in the UK and then invoice clearly stating there is no VAT.

              A few questions that follow, assuming i setup as a sole trader
              1) W-8BEN (as an individual) is the form I will need to fill in and give to the US company?
              2) I assume given the amounts involved, I will need to register for VAT given the turnover in UK? Although this contractor arrangement is outside VAT (given what we discussed)
              3) Will I be ok to invoice in dollars? Am I also allowed to claim some expenses as a sole trader?

              Thanks
              Jonty
              1 No idea.

              2 I wouldn't do anything intil got near to the VAT threshold myself.

              3 Dollar invoice is fine.

              Don't be a self employed sole trader. That = Unlimited personal liability. Legitimate business expenses are not a problem.
              Public Service Posting by the BBC - Bloggs Bulls**t Corp.
              Officially CUK certified - Thick as f**k.

              Comment


                #8
                Originally posted by eek View Post
                Do not work for an American firm without a limited liability entity between you and the client
                This with big brass knobs on. Make sure no contractual stuff references you personally. Any contracts should be with an incorporated entity at your end.
                Public Service Posting by the BBC - Bloggs Bulls**t Corp.
                Officially CUK certified - Thick as f**k.

                Comment


                  #9
                  Originally posted by Jonty789 View Post
                  This is extremely helpful, thank you very much all for your timely responses.

                  So a simple way seems to be to setup a sole trader in the UK and then invoice clearly stating there is no VAT.

                  A few questions that follow, assuming i setup as a sole trader
                  1) W-8BEN (as an individual) is the form I will need to fill in and give to the US company?
                  2) I assume given the amounts involved, I will need to register for VAT given the turnover in UK? Although this contractor arrangement is outside VAT (given what we discussed)
                  3) Will I be ok to invoice in dollars? Am I also allowed to claim some expenses as a sole trader?

                  Thanks
                  Jonty
                  Yes, but the W8-BEN is only needed if they ask for it (they should). This isn’t actually sent to the IRS, it is just kept on record by the client.

                  Yes, you would need to register for VAT.

                  Yes, you can invoice in USD. Get a Wise account or similar.

                  Note the warnings above about being a sole trader. It does open you up to unlimited personal liability, in principle, which is why I wouldn’t take this route, even though it is a perfectly legitimate option. You can limit this liability with insurance, but insurance will only cover you up to a limit (and when the conditions are met).

                  Comment


                    #10
                    Originally posted by Fred Bloggs View Post

                    This with big brass knobs on. Make sure no contractual stuff references you personally. Any contracts should be with an incorporated entity at your end.
                    To make absolutely clear: as a sole trader, you could lose your house if the contract goes wrong.
                    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                    - Voltaire/Benjamin Franklin/Anne Frank...

                    Comment

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