# US Company hiring US contractor living in UK



## owloncology

Hello,

I manage a US partnership. We typically hire contractors in the US on a 1099 basis. We are in the process of hiring a contractor for work to be performed solely in the EU; she lives in the UK and is 95% owner of a company there, with which we have signed the contract. 

The sticky point is, she's a US citizen; she took up London residency in 2012. We have no idea how to proceed with respect to IRS tax obligations, but are scaring ourselves with all kinds of references to Form 8833, Section 877A (loss of US citizenship), form 1042-S, form W8-BEN, etc. We don't know how to proceed, and have contacted 3 US accountants thus far who are apparently clueless.

Any tips? We would like very much to be able to pay our UK contractor (who is a US citizen but will not be performing any work in the US) without withholding 30% of the payments, but I don't know the correct forms or processes to do this. Our partnership is too small to get into any tangles with the IRS. Any assistance is immensely appreciated!!!


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## Bevdeforges

Why wouldn't you simply take her on as a contractor? Her company should bill your company/partnership for whatever services she performs. It's up to how she is organized whether or not she has to bill you VAT (depends on where the services are performed), and how she reports income and expenses to both her country of residence and on her US tax returns.

There are lots of US citizens, resident abroad, who own companies and work for US and non-US organizations. She is not a non-US person unless she has formally renounced her US citizenship (and that's not easy to do these days).

Have her bill you for the work she performs, and treat her like any other foreign supplier. 
Cheers,
Bev


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## owloncology

Thank you Bev for your quick response! We are bringing her on as a contractor - I'm sorry, I used the word "hiring" but we have not hired her, we've contracted with her company, which is based in UK. She also owns a similar company based in the US, and only recently moved to the UK. 

We just don't know what the appropriate forms are to legitimize this and to avoid withholding; the IRS doesn't seem to differentiate too clearly between foreign persons and foreign entities when it comes to foreign vendors.

I should point out that this is our first foray into international waters, and all of our previous experience has been with US-based 1099 contractors.


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## Bevdeforges

As long as you're dealing with her business/company, you should treat her as a foreign vendor. She should invoice you for her services and then it's up to her to report her income as appropriate to her own tax circumstances (both to the UK revenue service and to the IRS). But you're not responsible for her reporting to the IRS. To you, she's "just a vendor" like any other.

The only inconvenience for you is that, if she is in a position to have to charge you VAT, you have to lump that into the cost of the services you're paying for.
Cheers,
Bev


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