# Residing in the UK, but working for US company



## joelblu (Sep 30, 2010)

I am a UK citizen living in the UK, but will soon be joining a small US company on a permanent basis. As the US company is small they do not have or intend to have an office in the UK and as such no payroll etc I imagine; however, a lot of the work they do with printers and clients is in Europe and the UK!

That said, I'm confused about what my options are with regard to paying tax and national insurance - as I'll be joining the company as a full-time employee soon.

I'd prefer not to set myself up as a contractor, responsible for my own tax and NI; but what alternative/s is there, if I'm on the payroll of a US based company as a UK citizen - but living and working in the UK?

I would really appreciate some help and advice as to how I deal with the above.

Many, many thanks in anticipation.


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## 90199 (Mar 21, 2010)

You have to pay tax and N.I., however if you go self employed you will find that your national Insurance contributions will be far lower,

Hepa


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## joelblu (Sep 30, 2010)

Whilst that's true, I will then have to employ an accountant to do my books, tax return etc as its not my cup of tea, which will mean I'm out-of-pocket if I go self-employed. As I say, I'd prefer to be on the US company payroll, and let the company take care of all that, but I don't understand what the income tax and NI implications are when I'm living and working in the UK but for a 'remote' US company, they would pay the tax and NI along with my salary, but this would have to be in the UK, not the US obviously, how does that work?



Hepa said:


> You have to pay tax and N.I., however if you go self employed you will find that your national Insurance contributions will be far lower,
> 
> Hepa


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## Bevdeforges (Nov 16, 2007)

joelblu said:


> Whilst that's true, I will then have to employ an accountant to do my books, tax return etc as its not my cup of tea, which will mean I'm out-of-pocket if I go self-employed. As I say, I'd prefer to be on the US company payroll, and let the company take care of all that, but I don't understand what the income tax and NI implications are when I'm living and working in the UK but for a 'remote' US company, they would pay the tax and NI along with my salary, but this would have to be in the UK, not the US obviously, how does that work?


Basically, it doesn't. If your employer doesn't have a UK presence (i.e. is not registered in the UK as a business entity of some sort) they can't handle the payroll issues for an "employee" resident in the UK.

If you are working as a contractor or self-employed, you need to be paid enough to cover your "salary" plus expenses, which include the employer contribution to the social insurances plus the costs of record-keeping, registration (for taxes and social insurances) and any services like accountants that may be required. As an employee you would also be getting benefit of things like the employer's office supplies, telephone, Internet connection, computer network, etc. All of which you will have to provide for yourself as a remote worker.

In the US, they normally recommend that someone going "independent" like that will need to be paid about twice their salary rate (per hour or per month) as what they would get as salary as part of the employer's payroll in order to make ends meet and wind up with a comparable level of pay. For European countries, there is also the issue of VAT - which you may need to assess when billing your "employer" (depending upon the nature of the work you do) for your services.

There are also US employers who propose these sorts of remote working arrangements because they hope to avoid the higher employee costs related to social insurances in European countries.
Cheers,
Bev


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## joelblu (Sep 30, 2010)

Bevdeforges said:


> Basically, it doesn't. If your employer doesn't have a UK presence (i.e. is not registered in the UK as a business entity of some sort) they can't handle the payroll issues for an "employee" resident in the UK.
> 
> If you are working as a contractor or self-employed, you need to be paid enough to cover your "salary" plus expenses, which include the employer contribution to the social insurances plus the costs of record-keeping, registration (for taxes and social insurances) and any services like accountants that may be required. As an employee you would also be getting benefit of things like the employer's office supplies, telephone, Internet connection, computer network, etc. All of which you will have to provide for yourself as a remote worker.
> 
> ...


Many thanks Bev, much appreciated!


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## joelblu (Sep 30, 2010)

hfmtax said:


> You can't be self-employed as you are employed by the US company. HMRC allow you to set up a UK payroll scheme where you deduct the tax and NI yourself. We do this for other UK residents working for US companies. It's simple to operate but the challenge is finding someone at the Revenue (or an accountant) who has heard of the scheme! Be glad to help. Don't go self-employed though as you're not - and it's not a choice under UK rules.
> 
> Ian Marlow


Ian, many thanks, this is good advice. Setting up a 'UK payroll' with the assistance of HMRC sounds perfect, but could perhaps be a challenge? That said, it must be done properly, so I would really value some help - if you'd be so kind?

Where do I begin?

Jason


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