# US Citizen Wanting To Work Remotely For UK Company



## porthos3 (Dec 18, 2014)

Hello,

While I am not technically an expatriate, I am facing similar issues that there appears to be a lot of knowledge about on this forum.

I am a US citizen (a software developer) wanting to work for a small UK company while living in the United States. I will be living in Idaho for the duration of any business I have with them.

I do not currently have the job, but the company has expressed some interest. I know they are looking into it, but wanted to do some research from my end as well.

How possible is this? What sort of legal hoops would we have to jump through?

What should I be expecting in terms of taxes?

Thank you!
Jonathan


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## Bevdeforges (Nov 16, 2007)

Basically, unless the UK company has an office somewhere in the US where they could put you on the payroll, you probably would do better to simply work for them on a "sole proprietor" basis. This means that they would pay you, without any withholdings for social security or taxes and then it would be up to you to pay taxes through your business. (You could just declare it on a Schedule C without having to incorporate, or set up a formal business - as you prefer.)

You'd have to handle the state and federal taxes, plus pay "self-employment tax" (which is twice the social security rate since you'd be paying both employer and employee portions yourself) - but you could take your business expenses (including an accountant, if you need one) as deductions.

You might want to visit a local accountant or accounting service to see what sort of arrangements they would be willing to set up for you as a self-employed business.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

You can also set up a "Solo 401(k)" under the arrangement Bev describes, if you wish.


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## porthos3 (Dec 18, 2014)

Thank you both so much. This will give me a place to start.

Obviously there are a lot of variables, but how would you expect taxes to compare to being self-employed in the United States?

I am aware that those who are self-employed must pay both the employee and employer parts of the Social Security taxes, but that deductions are available for this.

However, would I have to pay any additional UK taxes as the sole proprietor?

Thank you,
Jonathan


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## BBCWatcher (Dec 28, 2012)

You would be self-employed in the United States -- that's the point. The work takes place where you are physically located.


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## porthos3 (Dec 18, 2014)

Great! Thanks a lot!


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## Bevdeforges (Nov 16, 2007)

One small caveat to consider: we've had a spate of folks coming through here with their employers wanting to pay them on the local (for the employer) payroll to work remotely somewhere else. This is normally offered due to the arrangement being the easiest for the employer, with little or no consideration of the "employee's" side of things.

Some employers are hesitant to hire someone as a "consultant" because of tax issues on their side of things. But, you should be careful NOT to consent to having them take UK taxes on your "salary" as if you were a regular employee located in the UK - they should pay you gross (as a consultant or supplier located outside the UK) and probably they should pay you a bit more than if you were an "employee" (because you are covering all your own expenses, including the employer's share of social security). Don't forget you'll be paying for your own office supplies, computer connections, etc.

You should talk to an accountant or enrolled agent now (before they get all wrapped up in tax season) to get an idea of what services they can provide (some can actually set you up with a nice little "start up" package for a new business so that you'll prepare everything they need to help you with your taxes at the end of the year.
Cheers,
Bev


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## twostep (Apr 3, 2008)

Consultant is your easiest route. Plan on paying estimated taxes quarterly. IRS.gov gives a lot of information. Your tax bracket plus social security, Medicare, income tax federal/state, local if applicable, give or take 1/3.


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