Tax Issues

[JacenD]

I'm not sure if this is the proper forum for such things, but I thought i'd try...

If I do some consulting work while in the US for a UK company, would I ever have to pay tax in the UK? How about if I go over there once or twice a year?

Thanks for any help you may be able to give.

[Bevdeforges]

Like all things, "it depends."

Where are you "tax resident" and where is the actual work being done? How long are you physically present in the US vs. UK? And what sort of visa are you on in each country?

In very general terms, you normally wind up paying taxes to the country in which you are considered to be "resident" (which often means you must be physically present in the country for 183 days or more during the tax year - but there are exceptions).

The other complicating factor is that the tax year in the UK is April 6th to April 5th or something like that - so if you wind up paying taxes in both countries, the accounting can get tricky.
Cheers,
Bev

The UK can be very agressive with taxing the earnings of non-residents. They are particularly brutal with regards to sports stars:

Rafael Nadal: I lose money playing in London


If I were you though I would contact an international tax specialist to be absolutely sure of what your liability would be. In any case there would probably be a US tax liability in addition to any UK one. It is probably negligible but you can only go so far with the advice on an internet forum with something as important as your personal taxes!

Best

[JacenD]

So to clarify, assume I live and reside in the US. I may be in the UK for ~2weeks a year.

It does seem like I shouldn't be taxed in GB, but the company was talking about withholding British taxes.

I may have to take the advice given and consult with an international tax specialist. That being said, there aren't many that I know of.

Thanks for the help.

[Bevdeforges]

If the UK company is withholding taxes on what they pay you, they are trying to set you up as an employee, which you are not. What they should be doing is to pay you as a contractor - i.e. you send them a bill for your services and then you are responsible for paying your US taxes as a self-employed person. Or, you could bill them a set fee for what you're doing plus your expenses.

But as a contractor, you are responsible for the bookkeeping and for settling your own taxes in the US (where you are resident). Make sure what you're paid will cover your services and your expenses of doing business.
Cheers,
Bev

[JacenD]

I wouldn't mind being an employee save for the British taxes.

Thanks for the heads up on their intentions. It wasn't mine to be an employee..