# UK Resident, US Job telecommuting



## mehemlynn (Nov 16, 2011)

Hi All,

I'm trying to figure out the tax implications for telecommuting to my US job for the next year, while I look for work in the UK under my spouse visa.

I have resigned my current job and they want to hire me part time to fill in until someone is hired and trained.

I was hoping to leave the US income in the US, but understand that I will have to pay taxes at my new address in the UK.

My US employer does not have UK employees.

Any idea about where to start would be great.

M


----------



## Nononymous (Jul 12, 2011)

I've done similar things on a short-term basis, though not in the UK.

Simplest (though technically not kosher) option is to pretend it's not happening. Have your US employer deposit your pay to a US account as if you were still in the country, with all the various deductions, and leave the money there. Then get into the UK tax system when you start working in the UK. Not something you'd want to do permanently, but if it's only for a matter of months, who's to know?

Alternatively, I don't know, it's probably best to set yourself up as a contractor and bill your US employer and presumably also charge them UK VAT if that applies. You could still have the money deposited in the US.


----------



## Bevdeforges (Nov 16, 2007)

As a US citizen, you will always have to file a US tax return (at least any year when your worldwide income exceeds the filing threshold). 

Your obligation to pay income taxes generally falls in the country in which you are resident, with no regard to where the money is coming from. Because you are resident in the UK, you'll be entitled to take the foreign earned income exclusion so that you won't pay US income taxes on your earnings. You US "employer" should pay you like an outside consultant - i.e. no tax or social security withholding, and you'll get a 1099 at the end of the year rather than a W-2.

For the UK, you need to set yourself up as "self-employed." I'm not sure about how you do that, but we have plenty of other folks here on the forum who have done so.
Cheers,
Bev


----------



## nikkisizer (Aug 20, 2011)

Bevdeforges said:


> For the UK, you need to set yourself up as "self-employed." I'm not sure about how you do that, but we have plenty of other folks here on the forum who have done so


To set yourself up as self employed you will need to call HMRC and register for self assessment.

They will then issue you with a unique taxpayer reference (UTR) number which is needed to file your UK tax returns each year.


----------



## mehemlynn (Nov 16, 2011)

Here is my follow-up, my employer is a large university, so it might not be possible to do self-employed. 

Where do I find what would happen if they kept me on payroll (in other words for them)? 

I've tried a bunch of googling and can't find anything.

M


----------



## Nononymous (Jul 12, 2011)

You need to talk to someone at the university and explain the situation - Google likely won't be much help. I can't see why they wouldn't set you up as a vendor and let you bill. If they pay you a salary, they should not be deducting for income tax or social security or anything like that, as you should be paying that to the UK if you are resident there. As a contractor, you should possibly charge UK VAT as well if that applies to services.

That being said, if it's only for a few months, the pragmatic thing would be to just stay on salary and have it paid as if you were living in the US, and not worry about the UK (even though that's technically not allowed). But if it's a full year that's too long, you'll need to have this sorted.


----------

