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Topic: embarrassingly basic tax questions  (Read 757 times)

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embarrassingly basic tax questions
« on: March 17, 2008, 04:40:28 PM »
First, the stats:
a) Moved to UK in Feb. 07.
b) I'm self-employed, with both UK (1) and US (3) clients.
c) I have one 2007 W2, for those 5 days of January I worked in the US.
d) Husband also has a 2007 W2 for that 1 month of January he worked.
e) In the UK, Husband works for an Actual UK Company that has deducted his (UK) taxes.
f) Husband got a tax statement thingy last April telling him how much tax had been withheld.
g) Prompted by HMRC, I did the online self-assessment for the 6 weeks of the 2006-2007 tax year I worked here. (I owed nothing.)

Questions:
1) Do all of the above make our US taxes hopeless? :)
2) Do we need to do anything else in terms of UK taxes, as far as my husband is concerned?
3) Do I need to do anything else in terms of UK taxes, or assume now that I'm on HMRC's radar, they'll come to me?
4) US and UK tax years are different. Does this matter, or how does it affect us?
5) Does the IRS care if I had some US and some UK clients? (was paid in both dollars and pounds; all US checks went to US bank account, and UK checks went to UK banks, but I can't imagine that matters. OR does it???)
6) We had a fabulous tax preparer in the US. Assuming she's up on the latest US tax laws, is there any reason she couldn't prepare our taxes again even though we're now living overseas?

Once I typed these questions out, I realize they're quite random and maybe not even meaningful. But I just can't even figure out where to start. Is there something for me to "file" in the UK? Should I just start downloading US forms and preparing as normal, with the big exception that I have to add an extra 17 forms? Should I start praying that our Fabulous Tax Preparer says, "sure, FedEx everything over, I can do it all from here?"

Thanks for even bothering to read this. :)

KT
KTinDC -- in Cambridge as of 12 Feb 07!
http://dceditorsincambridge.blogspot.com


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Re: embarrassingly basic tax questions
« Reply #1 on: March 18, 2008, 08:03:38 AM »
Firstly well done for asking.

A few random answers:

1. I assume you are registered as self-employed and paying Class 2 NIC?
2. I assume you realise that the UK will need to pay tax on both your UK & US self-employed earnings.
3. As you are both non-doms there may be some non-dom planning to be done.
4. Your US preparer may be the way too go, but s/he may not be aware enough of the US/UK tax and social security treaties or understand the foreign issues.
5. Without knowing how long you expect to stay and more about your husband's work patterns it is not possible to be certain he is getting the best UK tax answer.


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Re: embarrassingly basic tax questions
« Reply #2 on: March 18, 2008, 09:54:29 AM »
1. I assume you are registered as self-employed and paying Class 2 NIC?
Yep!
2. I assume you realise that the UK will need to pay tax on both your UK & US self-employed earnings.
Yep.
3. As you are both non-doms there may be some non-dom planning to be done.
Hmm. OK. We are indeed resident but non-domiciled. I don't know what planning that involves, though.
4. Your US preparer may be the way too go, but s/he may not be aware enough of the US/UK tax and social security treaties or understand the foreign issues.
Yep, Husband emailed her yesterday to find out what she can do, or if she has someone who can help her with it.
5. Without knowing how long you expect to stay and more about your husband's work patterns it is not possible to be certain he is getting the best UK tax answer.
We'll be here a minimum of 3 years, probably not longer than 5. My husband works full-time and did whatever his HR person told him to do in terms of taxes. He's the third American to come from the US office to the UK for this position, so we're sort of taking for granted that HR person knows what she's doing!

Many thanks,
KT
KTinDC -- in Cambridge as of 12 Feb 07!
http://dceditorsincambridge.blogspot.com


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Re: embarrassingly basic tax questions
« Reply #3 on: March 18, 2008, 11:42:19 AM »
If your husband is on a work permit, then he must pay the full amount of income tax and NI that a UK national would earn, ie the PAYE that is deducted from his pay.  This is not a tax law issue (I am not a tax expert) but it is a requirement of the work permit scheme.

Vicky


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