Paying UK/US Taxes as a Contractor

Hello all,

I was wondering if anyone could give some advice on what tax filings are required for UK residents earning income in the US.

I have lived in the UK for almost 7 years now and up until May of last year I earned my income in the UK. I filed my US taxes every year claiming foreign income relief so I wouldn't be doubled taxed.

Now I am a contractor for a US company and I have filed my US taxes accordingly, but I'm a little confused about filing with the HMRC. Will I now be double taxed since I filed in the US first? Or how does it work...

Any help would be appreciated!!

(for a little more context - I am on my 2nd FLRM visa (just granted today!). I plan on applying for ILR as soon as I can and if possible, I would like to use my self-employment income on my next application...if I'm still working as a contractor that is   ).

Best,
Tessa

I don’t know the answer, but am sure that you won’t be taxed twice.  In my case I am a UK resident and USC and receive a pension in the USA from a US company. HMRC taxes this income and I claim back the taxes as foreign tax credits on my US return using Form 1116. Because the income is in the USA I have to check the box labeled “Resourced By Treaty” on form 1116 so that it is treated as foreign income.

That is how it works for US pensions, and for dividends etc,  but I don’t know the rule for earned income. Possibly pay US taxes and HMRC taxes but get HMRC foreign tax credits, but for sure no double taxation. Hopefully someone will come along with the correct answer.

(for a little more context - I am on my 2nd FLRM visa (just granted today!). I plan on applying for ILR as soon as I can and if possible, I would like to use my self-employment income on my next application...if I'm still working as a contractor that is   ).

Best,
Tessa

Congratulations!

Using self employment income to meet the financial requirements is a last resort for most applicants who do. There is so much more paperwork involved than with the rest of the categories and you must use the whole year or the average of the last 2.

If you still want to go that route, you should become familiar with the requirements now and be quite sure you can meet them.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/996814/appendix-fm-1-7-financial-requirement-v7.0-ext.pdf

https://www.gov.uk/guidance/immigration-rules/immigration-rules-appendix-fm-se-family-members-specified-evidence

Hello all,

I was wondering if anyone could give some advice on what tax filings are required for UK residents earning income in the US.

I have lived in the UK for almost 7 years now and up until May of last year I earned my income in the UK. I filed my US taxes every year claiming foreign income relief so I wouldn't be doubled taxed.

Now I am a contractor for a US company and I have filed my US taxes accordingly, but I'm a little confused about filing with the HMRC. Will I now be double taxed since I filed in the US first? Or how does it work...

Any help would be appreciated!!

(for a little more context - I am on my 2nd FLRM visa (just granted today!). I plan on applying for ILR as soon as I can and if possible, I would like to use my self-employment income on my next application...if I'm still working as a contractor that is   ).

Best,
Tessa

It's a bit more complicated than filing your US taxes as normal. You should be getting advice from an accountant qualified in both countries honestly, but you will need to file a self assessment here and also pay your NI contributions.