UK contractor working in UK for US based company : advice needed UK contractor working in UK for US based company : advice needed
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  1. #1

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    Default UK contractor working in UK for US based company : advice needed

    Hi

    I'm a first time contractor and about to sign a contract to work for from home (UK) for a US based firm.

    Looking around on t'internet a bit it looks like I'll fall inside of IR35 so is my only option to use a umbrella company or are there any other alternatives?

    Plus I've read that I may have to pay tax in the US as well as the UK, is this correct, if so how do I go about doing this and will this mean I'll have to pay twice?

    Does anyone have any experience / advice about this situation?

  2. #2

    I live on CUK

    SueEllen's Avatar
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    Why don't you get the contract checked out by a lawyer before you sign it?

    As you are working at home in the UK the US based client can't really have any direction and control over you. Plus would probably be very happy not to pay you if there is no work for you to do.

    The lawyer could then do a redraft so it doesn't fall into IR35 which both you and the client will be happy with.

  3. #3

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    Thanks for the response

    I'm a bit wary about the whole IR35 thing, being a newb to all this I don't want to do any fancy messing about with that area just yet. I heard somewhere that the government are supposed to be making the IR35 thing a lot clearer to navigate sometime early next year so hopefully I can have another look into it then.

  4. #4

    More fingers than teeth

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    Yes agree with the above, you're very "un"IR35. You're using your own equipment, no working hours , no holiday, I mean the client won't even realise you're on holiday will he really as long as you have a blackberry, and the final nail in the coffin, an HMRC inspector won't even be able to begine to enquire with the client, not without approval from the FBI.

    Nope just check your contract, which I can't imagine is IR35.
    I'm alright Jack

  5. #5

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    Default UK Contractor working for US based company

    So, you are not going on their payroll?
    That means that they mean to treat you as independent, and avoid the Employers NI.
    And avoid giving you the employment protections that apply to employees – and effectively have instead the US Employment at Will rules applying over here.

    Get the contract checked by a lawyer, or a firm of UK accountants specialising in this area (like ourselves www .kevinbeare.com).

    If independent, You can either be self employed, and personally liable for any risks (like someone falling over your brief case or computer etc, and suing you), or trade through a limited company – which carries a measure of protection – but is no substitute from proper insurance(professional indemnity or employers liability etc). Incidentally those insurance costs would also be borne by the US company of you were their employee.
    Yes, IR 35 might be an issue, but again you need to check the terms of the contract, which may have been drawn up by a US law firm with no regard for the complexities of English taxation. Working inside your company was exactly why the IR 35 legislation came in. Using someone else’s umbrella company is possible for a cost but with no guarantee that it will not be challenged by HMRC.
    Oh, and don’t forget VAT – If your turnover: remuneration, bonuses/commission, car allowance private medical premium reimbursement if included, and Expenses reimbursed should reach £70,000 then you must register for UK VAT.

    On a brighter note, I have no idea why your UK income should be considered taxable in the US.


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  6. #6

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    "On a brighter note, I have no idea why your UK income should be considered taxable in the US."

    That is good news

    Thanks for the advice

  7. #7

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    Hi someguy1,

    I am now in the same situation you were in, and would love to know how you got on.

    I have a company who would be prepared to sponsor my H1B visa, but owing to the time of year and current quota being complete, this will not be possible until next February.

    I was thinking of setting up an Ltd, and working as a consultant. And the US based firm contracting my services whilst being based in the UK.

    Is this what you did?

  8. #8

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    He hasn't logged in since March 2012 so I think you are going to be waiting awhile for a response.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  9. #9

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    Default some hard learned lessons

    I just learned some lessons about this the hard way. If you go to the US to visit the client you need to be very careful. Then it is much safer to have a LTD company. Sole trader will not cut it with border control. You need business cards to prove you are a legitimate business. Look at the US Embassy website and acquaint yourself with the business activities you are allowed to engage in on a non-immigrant business visa and make sure you comply with this. Limit the time you stay the US as much as possible e.g. a week not two. Consider getting a letter from the company about exactly what you will be doing in the US (e.g. training) perhaps with an itemized schedule. Make sure you pay for the flight and the hotel. If in doubt, consult an immigration lawyer before travelling.

    If anyone else has any advice about working remote I would be very interested to here it. Personally i would prefer to be on site with a proper temporary visa but it doesnt look like the US government is going to issue some any time soon even with all the current vacancies in silicon valley.

  10. #10

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    Quote Originally Posted by gnarlycoder View Post
    I just learned some lessons about this the hard way. If you go to the US to visit the client you need to be very careful. Then it is much safer to have a LTD company. Sole trader will not cut it with border control. You need business cards to prove you are a legitimate business. Look at the US Embassy website and acquaint yourself with the business activities you are allowed to engage in on a non-immigrant business visa and make sure you comply with this. Limit the time you stay the US as much as possible e.g. a week not two. Consider getting a letter from the company about exactly what you will be doing in the US (e.g. training) perhaps with an itemized schedule. Make sure you pay for the flight and the hotel. If in doubt, consult an immigration lawyer before travelling.

    If anyone else has any advice about working remote I would be very interested to here it. Personally i would prefer to be on site with a proper temporary visa but it doesnt look like the US government is going to issue some any time soon even with all the current vacancies in silicon valley.
    Ouch, yes. I'm afraid that, if you weren't allowed entry this time, you won't be able to gain access under the Visa Waiver program in future. Essentially, you need to review the terms of the visa waiver before travel, which means not doing any type of "productive work" (including delivering training, actually - participating is fine). The same conditions apply to a B-1 visa. You can attend meetings without issues, but you should, indeed, take proof of your status, including the nature of the meeting and a letter of invitation, as well as details about YourCo. Sorry you learned the hard way.

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