# P1s and tax



## Dan Hodder (2 mo ago)

Good afternoon. 

I need a little help with the best route on potential employment and tax.

I have an opportunity to work with a race team in the US (Indy to be precise). The non immigrant visa will be a P1s (support staff of an international athlete). The team wants to pretty much employ me rather than use me as a UK (company) based consultant.

They will deduct the relevant tax and contributions for state/ Gov in the US. 

My question is, what is the best way for me to handle UK income and tax? The plan was to form a UK company, employ myself and try to be as clean as possible. My issue is obviously the double tax scenario. If the team is paying what they need to in the states, which makes my status there legal, what are my obligations here and what am i able to claim back should I end up paying two lots of income tax.

Any help in reasonably simple terms would be great.

Many thanks.


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## Moulard (Feb 3, 2017)

As you rightly point out, as the income will be considered US sourced the US will have the right to tax the income.
If you remain a tax resident of the UK then the UK will maintain the right to tax your global income.
The tax treaty between the US and UK provides relief from the double taxation that results.

Basically you will be able to claim a tax credit for US Federal income taxes paid against your UK tax liability.
US states are not party to the tax treaty so whether or not you would be able to claim a credit for US State taxes paid will be up to UK domestic tax law.

Note that because of the way the treaty clauses work, you will end up paying the higher of the two tax rates, possibly split between the two countries.


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## Dan Hodder (2 mo ago)

ok thanks for that, seems I'm thinking correctly about it. Their CFO seems pretty switched on so i'm sure he would cover the US, I guess i'll just have to talk with HMRC and see what is the correct procedure from here. cheers.


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## Moulard (Feb 3, 2017)

The other component in the mix would be US Social Security contributions. You won't be able to avoid those, but you would not have NI contributions on that income.

To establish an exemption from compulsory coverage and taxes under the U.K. system, your employer must request a certificate of coverage (form US/UK 1) from the SSA Office of International programs.

I don't know the UK system, but I assume you would attache the certificate of coverage to your UK tax return.

If you end up with 6 quarters, of contributions, you would be eligible for partial US Social Security benefits .. if less than that you miss out.

For more info...



https://www.ssa.gov/pubs/EN-05-10199.pdf


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## Dan Hodder (2 mo ago)

Moulard said:


> The other component in the mix would be US Social Security contributions. You won't be able to avoid those, but you would not have NI contributions on that income.
> 
> To establish an exemption from compulsory coverage and taxes under the U.K. system, your employer must request a certificate of coverage (form US/UK 1) from the SSA Office of International programs.
> 
> ...


that's great, thanks for the help. much appreciated.


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