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Previously on "Transferwise (multi-currency account) for accepting USD... Tax issues?"

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  • DerekDuvall
    replied
    Unsolicited advice

    Originally posted by paskesaurus View Post
    Yes, thanks for the heads up. I did notice that QDOS for example didn't seem to cover North America!

    While I have you, with a W8-BEN-E, is it necessary to get a US tax number (EIN) by filing SS-4, (and then 8832 as I am a sole director ltd co), or is this a step you'd only take if they requested it?

    Cheers!
    I know you didn't ask THAT question, but as you posted that QDOS doesn't offer NORAM PI and as I was facing the same issue I'd just like to share that eventually I managed with HISCOX. But my quest has been a pain as I had to have specific wording in my insurance to qualify for a certain job.

    Leave a comment:


  • The Spartan
    replied
    Originally posted by paskesaurus View Post
    Yes, thanks for the heads up. I did notice that QDOS for example didn't seem to cover North America!

    While I have you, with a W8-BEN-E, is it necessary to get a US tax number (EIN) by filing SS-4, (and then 8832 as I am a sole director ltd co), or is this a step you'd only take if they requested it?

    Cheers!
    I've just been through the same process, the quickest way to get an EIN is to phone the IRS as soon as it opens. You then get asked a series of questions and they give you your EIN for the W-8BEN-E as well as posting it to you. Transferwise was so easy and efficient to use for USD to GBP the fees were low and it's so easy to setup and administer.

    Leave a comment:


  • cojak
    replied
    Originally posted by ladymuck View Post
    Is this worth making a sticky as there's lots of useful info here?
    Done!

    Leave a comment:


  • ladymuck
    replied
    Is this worth making a sticky as there's lots of useful info here?

    Leave a comment:


  • jamesbrown
    replied
    Originally posted by paskesaurus View Post
    Yes, thanks for the heads up. I did notice that QDOS for example didn't seem to cover North America!

    While I have you, with a W8-BEN-E, is it necessary to get a US tax number (EIN) by filing SS-4, (and then 8832 as I am a sole director ltd co), or is this a step you'd only take if they requested it?

    Cheers!
    Ultimately, this will depend on your client because the form is for them to hold on record and satisfy themselves that withholding is not required. They don’t actually send this form to the IRS but retain it as proof that they operated the correct withholding, i.e. none. If you do need one, there is a dedicated IRS phone number (not toll free though). If you submit the SS-4, it could take weeks. If you call the number, you’ll get one at the end of the call and written confirmation later.

    Leave a comment:


  • paskesaurus
    replied
    Originally posted by jamesbrown View Post
    Oh and, while you didn’t ask, you’ll need to ensure your PI insurance covers North America unless the contract has UK jurisdiction and governing law of England and Wales.
    Yes, thanks for the heads up. I did notice that QDOS for example didn't seem to cover North America!

    While I have you, with a W8-BEN-E, is it necessary to get a US tax number (EIN) by filing SS-4, (and then 8832 as I am a sole director ltd co), or is this a step you'd only take if they requested it?

    Cheers!
    Last edited by paskesaurus; 6 December 2020, 05:02. Reason: clarification

    Leave a comment:


  • jamesbrown
    replied
    Oh and, while you didn’t ask, you’ll need to ensure your PI insurance covers North America unless the contract has UK jurisdiction and governing law of England and Wales.

    Leave a comment:


  • jamesbrown
    replied
    Originally posted by paskesaurus View Post
    Thank you so much! I see you around a lot answering these types of questions, and it is really appreciated!
    No problem.

    Transferwise is a good choice too. Just give the client your Transferwise US bank account details and job done. Interface is super easy and currency costs amount to about 0.5%, all in. Would highly recommend.

    Leave a comment:


  • paskesaurus
    replied
    Originally posted by jamesbrown View Post
    Correct and, no, currency/payment and tax liability are completely orthogonal. If you’re not a US citizen, then this will qualify as the non-US source income of a non-US person. No liability or withholding and the W8-BEN-E is for their benefit only. Outside of the scope of UK VAT (*assuming* this is routine B2B IT services - but you can check the place of supply rules if not). In short, you’ve got it covered.
    Thank you so much! I see you around a lot answering these types of questions, and it is really appreciated!

    Leave a comment:


  • jamesbrown
    replied
    Correct and, no, currency/payment and tax liability are completely orthogonal. If you’re not a US citizen, then this will qualify as the non-US source income of a non-US person. No liability or withholding and the W8-BEN-E is for their benefit only. Outside of the scope of UK VAT (*assuming* this is routine B2B IT services - but you can check the place of supply rules if not). In short, you’ve got it covered.

    Leave a comment:


  • Transferwise (multi-currency account) for accepting USD... Tax issues?

    Hi,

    Apologies if this has been covered elsewhere. I have just accepted my first (IT) contract, and wanted to clarify some things regarding US tax. My company will be doing all work outside of the US (in the UK), and will not have a US address.

    From what I understand, as I will be completing the work from the UK, I will not have to pay US taxes on this income (the client may ask me to fill in a W8-BEN-E in case they get audited), and I will also not have to charge VAT to the client. Please correct me if any of this is wrong.

    As I will be paid in USD, It seems sensible to accept this in the local currency and convert as required. Transferwise offer a multi-currency account. This allows you to have a US routing number and account number.

    Does accepting USD into such an account make me liable for taxes in the US?

    Cheers!

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