# UK citizen working for US company, living in UK



## SDent (Mar 5, 2009)

Hello everyone!
I have a slightly complicated situation I could use some help sorting through.
I am a British citizen currently living in the US. I am married to an American and am a permanent resident. I work for a US company who do business only in the US.
My wife and I are planning on moving back to England to live. The company I work for have agreed to let me continue to work for them remotely from England if we can work through all the logistics. My questions are as follows:
1. Would I pay US tax or UK taxes? What does the company/I have to do to set it up correctly?
2. I believe by moving permanently to England I will lose my permanent residence status in the US. Does this impact my ability to work for a US company? What are the implications of this?
3. Are there any legal / significant cost implications to the US company?

Guess thats it for now - I'm sure more questions will arise..
Any help will be greatfully received!
Thank you!


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## Bevdeforges (Nov 16, 2007)

SDent said:


> Hello everyone!
> I have a slightly complicated situation I could use some help sorting through.
> I am a British citizen currently living in the US. I am married to an American and am a permanent resident. I work for a US company who do business only in the US.
> My wife and I are planning on moving back to England to live. The company I work for have agreed to let me continue to work for them remotely from England if we can work through all the logistics. My questions are as follows:
> ...


It's actually not as complicated (or as uncommon) as you may think.

1. If you are resident in the UK, you pay UK taxes (and social insurances). However, as long as you retain your permanent residence in the US, you also have to file US taxes (and your wife has to continue to file US taxes forever as a US citizen). There is a provision for excluding your overseas earned income so you aren't double-taxed. If your company has a UK presence (office, branch, subsidiary), they should pay you through that office payroll.

If they don't have a UK presence, you will have to set up some sort of "self-employment" structure (usually a "consulting business") and take your pay as "fees." That adds a certain level of complication, as you then become responsible for your own taxes, social insurances and business expenses. As a contractor you normally would need to be paid a bit more than your current salary in order to stay even - especially if you need accounting or other help to keep your books and payroll records.

2. Your permanent residence status has nothing to do with whether or not you can work for a US based company. On the other hand, if you give up your green card, it may become difficult to relocate back to the US. You might want to consider taking US citizenship before making the big move.

3. As I noted in no. 1, you may find it necessary to re-negotiate your pay before changing your status to become a contractor. Consider all the little expenses you will incur (paper, pens, computer, software, travel expenses, etc.) that will now come out of the amount you're being paid. If you will need accounting or tax help, that also will have to be paid out of your "fees." I don't know the UK rules on VAT, but in some countries, a contractor has to add VAT to the fees they charge. (Assuming you're in a "service" industry, the service is being rendered in the UK if you are physically present there while performing it. You can usually only get out of paying VAT if you have a physical product you are shipping out of the country - and software is considered a "service" under EU rules.)
Cheers,
Bev


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## SDent (Mar 5, 2009)

Thank you so much Bev,
So my company definitely does not have a UK branch unfortunately. Does that mean there is no possible way I can continue to be an employee of the company while working in England? 
From your response it looks like my only option is to become self-employed... guess i don't really know what that involves but it seems like it would be complicated! Any advice on where to start learning about that?
You mention taking US citizenship, I was under the understanding that doing so would mean I would give up my UK citizenship - and therefore presumably lose my permission to work in the UK?
Thanks again for the advice!


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## Bevdeforges (Nov 16, 2007)

I'm not the one to help you with self-employment in the UK, but I can tell you that taking US citizenship will not cost you your UK citizenship. The oath they administer says that your "foreswear all other allegiances" or something to that effect. But these days the US doesn't require you to formally renounce your prior nationality. While they don't exactly recognize dual nationality, they kind of live with it.
Cheers,
Bev


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## SDent (Mar 5, 2009)

Does anyone know the rules around subcontracting and needing to have more than one client??... Are you able to work for only one company and still be a subcontractor?


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## Bevdeforges (Nov 16, 2007)

It's the US tax authorities that have all the rules about contractors - and that's to avoid the employers getting out of paying their share of the withholdings and social insurances. If you're working in the UK for a US employer who doesn't have a payroll presence there (i.e. so that the employer can pay their share of payroll taxes), then some form of contracting or self-employment is really your only option.

But be very careful that the amounts you are being paid will cover not only your old salary, but also your added costs (additional taxes, plus expenses and any VAT liability). That's normally the big objection the foreign/US companies have to allowing people to work remotely, as ultimately it can cost them quite a bit more than simply running your pay through their normal payroll system.
Cheers,
Bev


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## LindyLoo48 (Jul 17, 2010)

Hi everyone!
I am also very confused about my situation...I have been offered a job for a USA based company, and did at one time stay in the states for two years a long time ago.I didnt have a green card tho.
I now am living back in the UK and the company that offered me the job are asking me to fill in a W-4 form? I understand they need records for their accountant but surely I will pay tax here not there?
Does anyone know any other way for them to have records for their company without witholding money from me? I think myself, that I would be classed as self employed maybe?


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## Bevdeforges (Nov 16, 2007)

LindyLoo48 said:


> Hi everyone!
> I am also very confused about my situation...I have been offered a job for a USA based company, and did at one time stay in the states for two years a long time ago.I didnt have a green card tho.
> I now am living back in the UK and the company that offered me the job are asking me to fill in a W-4 form? I understand they need records for their accountant but surely I will pay tax here not there?
> Does anyone know any other way for them to have records for their company without witholding money from me? I think myself, that I would be classed as self employed maybe?


I assume you will be working remotely for them. You should NOT be asked to fill out a W-4 as you will not be an "employee" as such. They either must put you on the payroll of their UK affiliate or treat you as a contractor/vendor - which means you bill them for whatever work it is you are doing for them and then you pay your own UK taxes and social insurances according to whatever business entity you are working under.

This often happens with small companies that don't understand the rules for hiring workers or contracting for services from abroad. They cannot and should not be withholding taxes or social security from anything they pay you. You should probably ask to establish a contract for whatever services it is you're providing for them. 
Cheers,
Bev


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## LindyLoo48 (Jul 17, 2010)

Bevdeforges said:


> I assume you will be working remotely for them. You should NOT be asked to fill out a W-4 as you will not be an "employee" as such. They either must put you on the payroll of their UK affiliate or treat you as a contractor/vendor - which means you bill them for whatever work it is you are doing for them and then you pay your own UK taxes and social insurances according to whatever business entity you are working under.
> 
> This often happens with small companies that don't understand the rules for hiring workers or contracting for services from abroad. They cannot and should not be withholding taxes or social security from anything they pay you. You should probably ask to establish a contract for whatever services it is you're providing for them.
> Cheers,
> Bev



Thank you so much Bev! You are an Angel!
I wonder if I can make up my own contract for them or if there is a web site I can go to to set one up?
I have to log on each morning to their site from 8.30 to 2.30 pm four days a week, where I am messaged with instructions and they are also sending information via email.

I have to say I was a little suspicious at first, but if they intend to do any ID Fraud...they will have a hard time cos my credit rating is nil anyway hehe!


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## Mix (Jul 18, 2010)

Bev's advice has been absolutely spot-on.

With regards to contracting, it's worth checking if the company has a standard contract that they use for other people in a similar role and situation. If you're dealing with recruitment, they may not be familiar with this (because they have employment-at-will, employment contracts are not that common). You may need to get them to speak to their procurement colleagues.

If you do need to write your own contract then in my experience it's worth getting help from an accountant or lawyer, especially for your first one. In particular, they will help you make the wording water-tight if you have any doubts about the company you are contracting with.

I'm new on this site so don't want to be seen as cross-promoting but there is a good site and forum for "contracting in the uk" - just google that phrase. The site is focussed on IT contracting but the forum section about accounting and legal issues is very useful for getting advice on issues such as IR35.


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## LindyLoo48 (Jul 17, 2010)

The situation is this....They are apparently a charity run organisation supporting foreign exchange students. They have sent me a contract to sign that states that I am responsible for the welfare and questions plus placement of these students to alleviatethe load from the states.
It gives me set hours and a basic wage that will be transferred into my bank every two weeks along with any expenses.
I am not willing to risk losing my Carers allowance or income support until I am sure they are legitimate, so I have offered a bank account that I barely use, and as I said before...they wont manage to get any form of identity theft from my name etc cos I cant get any credit!
I will make some enquiries about drawing up a contract tho via a solicitor.
I did contact them with Bevs advice and some info I found on the HMRC site and am waiting to hear from them hopefully later this afternoon.


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## Mrburrito (Feb 6, 2010)

Hi,

The original post pretty much sums up my situation. Working for a US brewery who want me working in the UK doing sales. I'm a UK citizen, currently living in USA on a green card.

Does anyone have new info?, I notice this is from 2009

Thanks


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## MRSSMITH (Jul 27, 2012)

Hi. I'm an American citizen - been living in the UK for the last year whilst doing an MA programme. I'm getting married to a UK citizen in a couple of months, and plan to stay in the UK indefinitely. I don't plan on renouncing my US citizenship...

My question is about taxes:: I'm currently working as a contractor for a US company. They don't have a branch in the UK so I'm under the impression that they will be mailing me checks when I submit fee statements. Then I am to pay taxes myself as a contractor to the UK? I read that there is an exclusion act that if I pay taxes in the UK, I still have to file US taxes but won't have to pay extra taxes most likely. - but I have to exclude myself from social security in the US via a social security website? Also, when I file both sets of taxes, do my partner and I then file a joint income tax statement to the US or the UK? Or does he only file in the UK and I file in the US & UK separately? As an independent contractor, I will also be working for clients who live in the UK. Do I include both sets of income on both statements? 

Sorry so many confusing questions but this process is baffling. Thanks a lot! Mrs. Smith


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## Joppa (Sep 7, 2009)

MRSSMITH

Repost on Expat Tax - Expat Forum For Expats, For Moving Overseas And For Jobs Abroad


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