Reply to: US client - No UK presence

[jamesbrown]

Yes, if you can get the jurisdiction and governing laws to be the courts and laws of England and Wales, respectively, that is much preferred, but this can be a deal breaker for large companies in my experience, even if you're calling the shots in general. If you have that, you won't need special PI insurance.

[openstrike]

However, it will come down in price through Randell Dorling, I think. Give them a call and see what they say (ask them for the price with IPSE membership too - in fact they may only do insurance with IPSE membership, I forget).

The only thing IPSE membership buys you with Randell Dorling is the shared pot. They do an exactly equivalent policy for the same price but without the shared pot and that's available to all comers.

I echo what everyone else has said: sole trader is fine but be sure of your insurance. I have always tried to mandate British (actually English) jurisdiction for contracts with USA clients but YMMV on that one.

Good luck.

[Pring]

Thanks. I spoke with Sue yesterday. She gave me some pointers. Who would you recommend for PI? Any website?

I use Kingsbridge for my PI insurance covering a contract under North American Jurisdiction (state of VA). You can't get a quote online and have to answer a series of questions about your contract. Not cheap but cheaper than Hiscox was...

[jamesbrown]

very interesting. I started to look around and called only one company so far. It's Hiscox!!! their cost goes up more than double when you add the USA. I just looked up IPSE membership. That is quite good. Learning so many things from you. I appreciate it very much.

No problem at all.

Yes, adding North American cover can be super expensive. If it's doubling, you're probably not doing that bad. However, it will come down in price through Randell Dorling, I think. Give them a call and see what they say (ask them for the price with IPSE membership too - in fact they may only do insurance with IPSE membership, I forget).

I think IPSE membership is worthwhile, on the whole. Putting aside their lobbying efforts (which I'm not a fan of, in general), I think the amount it costs is generally worth the accrued benefits gained, such as free life assurance (5k), tax investigation insurance (not tax loss, but the professional fees), client/agency failure cover up to 10k (I think) and a bunch of other stuff (e.g., Perkbox). There are plenty of other outfits that offer tax investigation insurance, but IPSE has a fairly broad set of benefits. YMMV.

[mcc1380]

I use Randell Dorling through my IPSE membership, underwritten by Hiscox. I haven't found a better price for North American coverage. It really pays to shop around, though, because you're likely to see some dramatically higher prices from some brokers.

very interesting. I started to look around and called only one company so far. It's Hiscox!!! their cost goes up more than double when you add the USA. I just looked up IPSE membership. That is quite good. Learning so many things from you. I appreciate it very much.

[jamesbrown]

Thanks. I spoke with Sue yesterday. She gave me some pointers. Who would you recommend for PI? Any website?

I use Randell Dorling through my IPSE membership, underwritten by Hiscox. I haven't found a better price for North American coverage. It really pays to shop around, though, because you're likely to see some dramatically higher prices from some brokers.

[mcc1380]

In that case, I don't think it's too complicated. You don't need to worry about IR35 or CEST. The client may need to worry about your employment status, but it's unlikely that you would look like an employee of a US client, in practice. The main things to think about are PI insurance (with North American coverage) and how you're going to exchange the USD (assuming they're paying you in USD): hint - TransferWise. The client may also ask you to complete a W8-BEN (US tax withholding form), but there's no need until they actually ask, and they may not.

Thanks. I spoke with Sue yesterday. She gave me some pointers. Who would you recommend for PI? Any website?

[jamesbrown]

I am likely to remain as sole trader, providing service as a technology consultant. I am totally a novice on all this. I never worked as a sole trader either. I understand the liability part now. That was very helpful.

In that case, I don't think it's too complicated. You don't need to worry about IR35 or CEST. The client may need to worry about your employment status, but it's unlikely that you would look like an employee of a US client, in practice. The main things to think about are PI insurance (with North American coverage) and how you're going to exchange the USD (assuming they're paying you in USD): hint - TransferWise. The client may also ask you to complete a W8-BEN (US tax withholding form), but there's no need until they actually ask, and they may not.

[mcc1380]

It depends whether you’re fixed on the sole trader route. If you aren’t, it’s more complex because you have more options. If you’re a sole trader, it’s really quite simple and essentially no different than working with a UK client, save the possibly greater risk from a lack of limited liability. I wouldn’t accept that risk, but it’s a personal choice.

I am likely to remain as sole trader, providing service as a technology consultant. I am totally a novice on all this. I never worked as a sole trader either. I understand the liability part now. That was very helpful.

[jamesbrown]

If your options remain open, you could try Sue @ IPaye. I think she is more focused on Europe but would still have a good general idea.

[jamesbrown]

Thanks for your quick response. It would be fair to say, I have no clue what I am getting my self into. Can you recommend a service/company who can guide me through this?

It depends whether you’re fixed on the sole trader route. If you aren’t, it’s more complex because you have more options. If you’re a sole trader, it’s really quite simple and essentially no different than working with a UK client, save the possibly greater risk from a lack of limited liability. I wouldn’t accept that risk, but it’s personal choice.

[mcc1380]

If you're self-employed, that's entirely different. While employment status is an issue for sole traders, it's primarily for the client or agent; there's no tax liability on you, personally. There's no intermediary, so the intermediaries legislation (IR35) doesn't apply.

The main issue for you will be the unlimited liability w/r to your personal assets if something goes wrong, contractually. Personally, I wouldn't work with any US clients unless I had the protection of a Ltd. company because the US is a litigious system.

Thanks for your quick response. It would be fair to say, I have no clue what I am getting my self into. Can you recommend a service/company who can guide me through this?

[jamesbrown]

Hi all,
This is my first post and while searching this forum, I found this thread, which seems pretty close to my situation. I also have been offered a contract position for a US-based startup company. Major difference is,

1) I don't have a PLC/PSC. I will work as a self-employed person.
2) I have tried my best to make the client aware of the HMRC rules that are on CEST. The contract I received from them, I would say, is not in line. Can someone recommend a tax solicitor, service or someone who can review contracts and make necessary adjustments?

Thanks

If you're self-employed, that's entirely different. While employment status is an issue for sole traders, it's primarily for the client or agent; there's no tax liability on you, personally. There's no intermediary, so the intermediaries legislation (IR35) doesn't apply.

The main issue for you will be the unlimited liability w/r to your personal assets if something goes wrong, contractually. Personally, I wouldn't work with any US clients unless I had the protection of a Ltd. company because the US is a litigious system.

[mcc1380]

US Client - No UK presence

Hi all,
This is my first post and while searching this forum, I found this thread, which seems pretty close to my situation. I also have been offered a contract position for a US-based startup company. Major difference is,

1) I don't have a PLC/PSC. I will work as a self-employed person.
2) I have tried my best to make the client aware of the HMRC rules that are on CEST. The contract I received from them, I would say, is not in line. Can someone recommend a tax solicitor, service or someone who can review contracts and make necessary adjustments?

Thanks

[WordIsBond]

Oh, I also use CEST for non-UK clients, always. I don't bother to ask the clients to do it, though. I do it myself based on the terms of the contract. If the contract states something, I work according to that, and I use CEST according to it as well. CEST answered according to the contract is IMO as good as a contract review, for a foreign client.

Foreign clients are not likely to agree a contract contrary to what they expect for working practices. It's not like a role through an agency where the client's expectations are in the agency contract that you never see. There, working practices trump the contract, but with a foreign client, in my experience, the contract will always match the client's expectation of working practices.

So CEST answered according to the contract which gives an outside determination is pretty strong evidence. I take it a step further -- it would be almost impossible for me to find a sub for most of my roles, because I'm so niche. So even though my contracts state the right to substitute, I'm alert to the fact that HMRC could ask if it is a sham since I don't have someone who could do it.

So I keep two CEST printouts for every contract. One shows me outside with the right of substitution. The other shows me outside even with no right of substitution, by virtue of no SDC.