# USA citizen with UK visa, working remotely as self-employed contractor. Help!



## jackpen (Feb 9, 2014)

Hi all,

My wife recently joined me from the USA (now in the UK) on a spouse visa, and she would like to begin working for herself, self employed. Her work would be graphic design, consultancy, etc. over the internet for clients in the US and also the UK.

Can anyone advise what steps we would need to take to ensure that all of her affairs with income and tax are correct?

I myself receive income from a US source, and the tax is waived on that, as I pay it in the UK - to avoid double taxation. Would my wife need to arrange for something similar?

Thank you


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## _shel (Mar 2, 2014)

Your wife is liable to file and pay taxes in the USA for the rest of her life regardless of which country she lives or works in if she is an American citizen. Your income could get pulled into that as you are married. 

If she is living in the UK she is liable to pay tax here too. There will be offsets for tax paid but her liability for tax wont be waived. 

You need to speak to good accountant who knows both systems well. Deloitte have been mentioned by American expats before.


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## Nononymous (Jul 12, 2011)

I don't believe that the non-US spouse will see their income pulled into US taxation. Never heard of that. The non-US spouse does not even need to be identified on US tax returns.

The US-citizen spouse is indeed, alas, required to file US tax returns (and FBAR and FATCA and all that) for the rest of her days. Many choose not to, but that's another thread. Filing is one thing, actually owing any money is quite another.

I don't think this is terribly complex. The US-citizen spouse is living permanently in the UK - that is her tax residence. She is a freelancer with clients in the US and UK. She files UK tax returns on her total income. She also files a US tax return but through credit for tax paid will likely owe nothing. There might be some complexities around US self-employment tax, social security, etc. but likely taken care of by the tax treaty.

Be aware that an accountant can cost you more than your tax bill, and those who aren't experts have been known to give some strange advice (quite apart from the "compliance industry" that generates business by scaring expats and dual citizens).


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## Bevdeforges (Nov 16, 2007)

She needs to set herself up as self-employed in the UK. Not entirely sure what that involves, but it should be fairly simple. Just find out how a self-employed individual in the UK is supposed to deal with social insurances and payment of taxes.

Once that is taken care of, she then files her US tax returns and can take the FEIE (Foreign Earned Income Exclusion) like most of the rest of us do. As long as she is set up to pay UK social insurances, she won't have to worry about US social security taxes (thanks to the treaty).

Some will say that you should consider taking the Foreign Tax Credit rather than the FEIE, but to keep it simple in the first year, the FEIE usually works out just fine. Since she'll be filing for US purposes as "married, filing separately" the FEIE is usually the simplest and most direct method. You can, however, work out the details about splitting whatever you pay to the UK once she has paid in for a year and see how that works out for her.
Cheers,
Bev


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## nikkisizer (Aug 20, 2011)

Bevdeforges said:


> She needs to set herself up as self-employed in the UK. Not entirely sure what that involves, but it should be fairly simple. Just find out how a self-employed individual in the UK is supposed to deal with social insurances and payment of taxes.


Hi jackpen,

Your wife would need to register for Self Assessment with HMRC for her self employment.

She will then need to file an annual tax return to calculate her Income Tax and Class 4 National Insurance Contributions due on any profits from her self employed business.

Class 2 National Insurance Contributions payable will be invoiced separately if applicable.


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## DavidMcKeegan (Aug 27, 2012)

The above is all correct. Firstly she will have to register as a self employed person in the UK and pay any UK taxes that arise.

She will also have to file a US return and report her worldwide income. Also have her get a Certificate of Coverage for her US returns so that she does not have to pay SE taxes again to the US. If her foreign bank accounts go over 10K (joint accounts included) she will also have to file an FBAR form.

I hope this helps!


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