Contractor based in UK working for US company in need of advice

[jamesbrown]

North Korea is the third one.

The USA imposes silly withholding taxes on payments to foreign suppliers, but is the responsibility of the US-based customer, not of the OP. The OP might have to send them a W1-BEN form to evidence that the OP is not a US citizen, if asked, in order to minimise withholding taxes.

Depends. There's no withholding for non-US source income of a non-US person/entity, which would cover most UK-based contractors (source = where the work is done for services). And it's a W8-BEN-E (for entity). However, there's also no reporting requirement on the above scenario.

[m0n1k3r]

That's right. I believe the only two countries in the world to do that are the US and Eritrea. Have I missed something? The OP hasn't said he is a US citizen has he?

North Korea is the third one.

The USA imposes silly withholding taxes on payments to foreign suppliers, but is the responsibility of the US-based customer, not of the OP. The OP might have to send them a W1-BEN form to evidence that the OP is not a US citizen, if asked, in order to minimise withholding taxes.

[Fred Bloggs]

I'm afraid the USA is a citizenship based Tax Country. Meaning all US citizens, regardless of where they live are required to file taxes. You may not end up owing any, but you still have to file are report all earnings, bank accounts outside the USA or you pay heavy fines. Business accounts apparently also have silly taxes.

That's right. I believe the only two countries in the world to do that are the US and Eritrea. Have I missed something? The OP hasn't said he is a US citizen has he?

[jaspin]

If he never sets foot out of the UK why would he have to pay US taxes? The mantra here has long been "you pay tax where you work". Myself, I'd likely consider clearing off to somewhere where there is no tax and just carry on as normal.

I'm afraid the USA is a citizenship based Tax Country. Meaning all US citizens, regardless of where they live are required to file taxes. You may not end up owing any, but you still have to file are report all earnings, bank accounts outside the USA or you pay heavy fines. Business accounts apparently also have silly taxes.

[northernladuk]

If this is all done in the UK then it's no different to an American walking into a shop in the UK and buying a pair of a shoes, i.e. there should be no US tax liability.
.

Indeed but we would give him opinion on his countrys leadership choices as we've all suddenly become experts on American politics .

[BlasterBates]

If this is all done in the UK then it's no different to an American walking into a shop in the UK and buying a pair of a shoes, i.e. there should be no US tax liability.

I would just see an Accountant and set up a UK ltd. You need to clarify VAT rules if invoicing a US customer.

[VectraMan]

It should be UK tax only.

As you've already been paid by the sound of it maybe it's better just to be self employed. But you should be IR35 proof which means a Ltd. is probably the best way and especially if you're prepared to do the work yourself.

It sounds like this would be outside the scope of what brollies usually do, but no harm in asking.

[Fred Bloggs]

If he never sets foot out of the UK why would he have to pay US taxes? The mantra here has long been "you pay tax where you work". Myself, I'd likely consider clearing off to somewhere where there is no tax and just carry on as normal.

[northernladuk]

For 2.5k a month and no expenses brolly might be an easy option for him as well. If so have a chat to Contractor Umbrella who post on here a lot.

Loving the way the OP has taken the gig without researching it first. Wonder how pleased they would be if turns out he should actually be paying 60% tax. Gig won't look so rosey then

[Lance]

Get an accountant, there are recommended ones on this forum.

You're a business now. There's more to it than 'paying your tax/NI and going on your way'.

It's an assumption he's a business now. He may well just be getting the cash paid to his personal bank.
So self-employed might be an option (although he should have told HMRC already).

An accountant would be useful but would they be able to answer the US tax questions? It's definitely the next port of call for the OP though.

[cojak]

Contractor based in UK working for US company in need of advice

Get an accountant, there are recommended ones on this forum.

You're a business now. There's more to it than 'paying your tax/NI and going on your way'.

[IC UK US]

Hi all,

So, for a few months now I've been working for a US company but based in the UK. I am yet to sort my tax situation & upon researching it, I have no clue which way to go about it!

For some background, I am currently only working for one company in the US. The contract is long-term. They pay me by bank-transfer. I have no expenses, I work from home from my computer and don't really get out much. I am getting around, at the moment, £2300-2500 p/month. I don't suspect I'll ever have to travel to the US for work purposes.

I've looked into setting up a limited company, umbrella companies or just sole trading and to be honest, I have more questions than when I began. I also don't know if I need to pay taxes just in the UK or in the US also.
So could anyone give me a good overview of where I stand? All I want to do is pay my taxes/NI and be on my way!

Thanks