US 1099 (contractor) or payroll (w2) employee better? - UK HMRC Self Assessment

Hey there, I've been reading through tons of threads and decided to finally ask my question directly in hopes that someone has some experience with my situation.

I am preparing to perform work for a few past employers. I have set myself up as a sole trader here in the UK via HMRC.

None of the companies have a UK presence at all, all of their business is carried out in various states in the US.

One of them asked me if they could run me through their payroll, rather than as a contractor. I'd love this because then I would be able to put money into my 401k, social security, etc. Is that even possible? Do I put something specific on the W4? Do I file with state taxes?

The other companies are using me as a contractor, that is straight forward. (I hope!) - I do know to be conscious of the tax years (Jan-Dec vs April-April)

I might be making all of this up, any tips/experience would be greatly appreciated.

Yes, I plan on speaking to a dual qualified tax accountant, I am trying to get my questions in order. Thanks so much !

I have an inactive LLC from years prior, I am now in the process to close that as I do not want UK presence. I will ensure to file any backdated HMRC corporation returns as needed.

The existing LLC became a UK resident company when you became UK resident, so would already be registered for UK corporation tax. You'll be filing UK corporation tax returns for this entity along with any CTA filing in the US from 2024. The main question you are asking is about the status of engagements you are or will undertake.  The laws of the nation where the work is performed will prevail. The question is one that you or the engager of the work would want to ask of an employment lawyer, not an accountant. I suspect that simply nicknaming an engagement as a "contractor" may have little effect on the status. The numbers "1099" have no meaning in British English.

The existing LLC became a UK resident company when you became UK resident, so would already be registered for UK corporation tax. You'll be filing UK corporation tax returns for this entity along with any CTA filing in the US from 2024. The main question you are asking is about the status of engagements you are or will undertake.  The laws of the nation where the work is performed will prevail. The question is one that you or the engager of the work would want to ask of an employment lawyer, not an accountant. I suspect that simply nicknaming an engagement as a "contractor" may have little effect on the status. The numbers "1099" have no meaning in British English.

Thanks, I'm going to close the old LLC and ensure to file any backdated retuns as needed.

I was using 1099 to distinguish what we classify contractors vs employees (w2) in the USA. I am aware that it has no meaning to anyone in the UK.

I was using 1099 to distinguish what we classify contractors vs employees (w2) in the USA. I am aware that it has no meaning to anyone in the UK.

I would check on what being paid through a W2 may entail.  For example I have a non-qualified pension reported on a W-2 and because it is paid by a Louisiana company it is subject to State income tax and I have to file a Louisiana tax return each year as a non-resident.  FICA (SS) and Medicare taxes are also taken out.

My daughter moved back to the UK from California last year and continued to receive her salary for a few months from her employer via W2 before they finally got her set up with their UK subsidiary. She also has to file as a non-resident and pay California taxes on that income reported on the W2. She should be free of California taxes in tax year 2024.

I would check on what being paid through a W2 may entail.  For example I have a non-qualified pension reported on a W-2 and because it is paid by a Louisiana company it is subject to State income tax and I have to file a Louisiana tax return each year as a non-resident.  FICA (SS) and Medicare taxes are also taken out.

My daughter moved back to the UK from California last year and continued to receive her salary for a few months from her employer via W2 before they finally got her set up with their UK subsidiary. She also has to file as a non-resident and pay California taxes on that income reported on the W2. She should be free of California taxes in tax year 2024.

Thanks! Appreciate it.