International tax questions for my business

I have been avoiding this subject, but I'll need to tackle it shortly.

I own two businesses in the states. One is a consulting firm (LLC), and the other is a wholesale operation (S-Corp). The LLC employs one individual in the states, and I am looking for a second before I head to the UK. The S-Corp employs four individuals in the states, and that is expected to grow exponentially over the next year.

I am looking to expand and establish both businesses in the UK. I want to hire an Executive Assistant for the consulting firm and several B2B salespersons for the wholesale business.

My go-to CPA's and attorneys in the states are obviously guessing when I ask them what I'll need to do in the UK. And my guess is many of their counterparts in the UK will struggle with the American component as well.

Does anyone know of solicitors or CPA's (what are they referred to as in the UK?) with international expertise? The trick here is my companies aren't large enough to warrant the cost associated with big firms.

Help!

Your questions have not elicited any comments. I think that this is because there are so many aspects. Here are some initial points for you to consider.

You will become UK resident. Therefore you will be taxed in the UK on UK source income and possibly on non UK source income , depending on whether you claim the use of the remittance basis.

You have mentioned that you will use a LLC and S Corp. You should reconsider this. These type of entities are tax opaque for UK tax purposes. Broadly this means that you are taxed on the amounts that you withdraw as if they were dividends. This means that you obtain no relief for US tax.

Some other aspects that you need to consider are-
•   UK payroll taxes for any UK based employees.
•   Registration for UK VAT.

Your questions have not elicited any comments. I think that this is because there are so many aspects. Here are some initial points for you to consider.

You will become UK resident. Therefore you will be taxed in the UK on UK source income and possibly on non UK source income , depending on whether you claim the use of the remittance basis.

You have mentioned that you will use a LLC and S Corp. You should reconsider this. These type of entities are tax opaque for UK tax purposes. Broadly this means that you are taxed on the amounts that you withdraw as if they were dividends. This means that you obtain no relief for US tax.

Some other aspects that you need to consider are-
•   UK payroll taxes for any UK based employees.
•   Registration for UK VAT.

One company is a C-Corp, one is an LLC, both are taxed as S-Corps in the US. Changing the structure of my companies that have been operational for years now could be problematic, but I am not at all opposed to making adjustments to the way I pay myself so as to ensure no issues arise.

Thank you, Dunedin. Do you know a UK tax professional you would recommend for help in sorting through the nuances associated with this adjustment?

I would doubt that a US domestic entity that is an LLC  or had made an election to be treated as an S-Corp would be suitable for a UK resident since both would probably become UK resident subject to UK corporate tax on their profits plus US Federal & State tax on underlying income.  Your existing accountants are the best place to start. If they cannot assist you will need a larger international accounting firm to assist you and your businesses.

I would doubt that a US domestic entity that is an LLC  or had made an election to be treated as an S-Corp would be suitable for a UK resident since both would probably become UK resident subject to UK corporate tax on their profits plus US Federal & State tax on underlying income.  Your existing accountants are the best place to start. If they cannot assist you will need a larger international accounting firm to assist you and your businesses.

So safe to say this isn't the place to ask for recommendations?

I also have a US based LLC and live in the UK. I struggled to find anyone who understood both systems enough to make me feel comfortable enough to use them. Everyone I talked to gave me different answers or wanted to charge me a lot of money to research the best solution. First, the UK doesn't recognize LLC's and treats that income like personal income. That's pretty common knowledge and you can read all about it on the interwebs.  I ended up starting a UK limited company in which I put all of my US profits into. That way my US LLC will not make any profit and my UK limited company will be something that a UK tax person can deal with. I did find a UK tax company I felt comfortable with and can share that with you if you'd like.