UK citizen working for US company

[SDent]

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!

[Fatbrit]

Too many "what ifs" in here.

Do you want to abandon your residency or not?

[SDent]

I was under the understanding that by moving to another country to live, I would have to abandon the residency. Our plan is to remain in the UK.

[Fatbrit]

Originally Posted by SDent

I was under the understanding that by moving to another country to live, I would have to abandon the residency. Our plan is to remain in the UK.

The only way to protect your status forever is to naturalize as a USC. As such, you are liable for tax on your worldwide income. However, there is a large dollop tax free for those who live abroad, and after that tax treaties often cut in to make it more of as paperwork exercise than a bleed-me-dry.

So if you want to be done with US taxes, relinquish your green card ((I-407) and move out. Your company won't be able to pay you as regular payroll employee so you'll probably need to write a contract with them to be paid as an overseas consultant for your work. Will they do this? Your USC spouse will still need to file a US tax return, but she can file without you on the ticket.

[SDent]

Thanks for the advice!
If I were to naturalize as a USC before i move back to England... would I then be able to be paid from the US company's payroll?? or is the only way this works for me to become self-employed in the UK?
Thanks again.

[Bevdeforges]

Originally Posted by SDent

Thanks for the advice!
If I were to naturalize as a USC before i move back to England... would I then be able to be paid from the US company's payroll?? or is the only way this works for me to become self-employed in the UK?
Thanks again.

If you're resident in the UK, you will be subject to UK tax and social insurances and therefore if your company has no payroll presence there, then yes, you'll have to become self-employed.
Cheers,
Bev

[Fatbrit]

Originally Posted by SDent

Thanks for the advice!
If I were to naturalize as a USC before i move back to England... would I then be able to be paid from the US company's payroll?? or is the only way this works for me to become self-employed in the UK?
Thanks again.

You certainly can't remain on the payroll if you're not authorized to work in the US. And if you abandoned your permanent residency, you would no longer be authorized. You can avoid this issue with naturalization. Whether they can keep you on if you're resident in another country, I do not know. I can see all sorts of complications.

[nardy8]

But you also can do this:
The law says that one person can have just one citizanship and one or more residences.
1. You can still keep your residence status in the US, but with one condition: at least 1 time in 6 months you have to re-enter in US (even for 1 day, but just as a tourist becouse you can't have an address there, you will pay taxes).
2. If you are a resident with no activities (financial) in any part of US, you will not pay any taxes in that country (no firm of your own, house, etc.).
3. The contract that you sign with the UK firm is an international one, but the taxes that you have to pay are in the country that you reside with the work.

[Bevdeforges]

Originally Posted by nardy8

But you also can do this:
The law says that one person can have just one citizanship and one or more residences.
1. You can still keep your residence status in the US, but with one condition: at least 1 time in 6 months you have to re-enter in US (even for 1 day, but just as a tourist becouse you can't have an address there, you will pay taxes).
2. If you are a resident with no activities (financial) in any part of US, you will not pay any taxes in that country (no firm of your own, house, etc.).
3. The contract that you sign with the UK firm is an international one, but the taxes that you have to pay are in the country that you reside with the work.

Sorry, Nardy, but I have to take issue with your points.

Not sure what law you're speaking of, but dual nationality is not illegal in the US. And "residence" has various meanings depending on the context. In the tax sense, there is generally only a single "tax residence" even if determining it might be a little bit difficult.

I won't speak to your point #1 because I don't have personal experience in the area, but what you say flies in the face of everything I've heard about those with permanent residence in the US (i.e. a green card).

#2 is misleading, if not exactly wrong. If you hold a green card, you must at least file US taxes, which involves reporting your worldwide income to the IRS. Normally only "unearned" income will be subject to US income tax but technically it is still taxable to green card holders.

#3 - If the OP is residing in the UK, they will be subject to the UK's labour laws. US firms normally don't use employment contracts (except for high ranking executives or a few other special categories of employees). If the OP accepts to work as a "contractor" while residing in the UK, he will be in essence setting up a UK business to provide services for his former employer unless the US company has some UK office to handle the payroll.
Cheers,
Bev

[nardy8]

"The law says that one person can have just one citizanship and one or more residences".
That means that you can't be citizen of two or more countries. Nationality is one and one only - ask any lawer Bev.
Residence - you can have one or more residences. This is legal.