US employee moving to UK with American company

I am an American about to accept a position in London with a US company.  I am trying to figure out the tax and salary implications of such a move.  I hear some employees have their salary split between getting paid in the UK in pounds with a portion of their salary paid in the US in dollars.  Does anyone have recommendations of how to best do this?

Also, I am getting conflicting opinions on the cost of living in London versus Manahattan.  Some say London is nearly twice as expensive, which seems nearly impossible given the cost of living in Manhattan!

Thanks...

Part of the planning is structuring your pay correctly - stay on US payroll?  Switch to UK?  Set up dual contracts (though that rarely works these days)?  There are various benefits and drawbacks to each, and they impact your company as much as they do you.  Since it impacts your company as well, your employer should be paying for and receiving this advice.  Trust me, they do not want to end up an extra $10,000 in the hole for making the wrong decision.

If they have got a plan in place, then what's good for the goose is usually what's good for the gander.  The plan usually includes free tax prep for at least your first year, but not advice.  Get a copy of the plan and confirm it is indeed the wisest course of action for you as well through independent dual-qualified US & UK personal tax advice.

If they haven't got a plan or an advisor already, you might want to bring to their attention the possible tax savings they may have by planning your move in advance.  The bigger your (combined) salary & bonus, the bigger the savings. 

I moved from New YOrk to London and yes... London is WAY more expensive

London is more expensive, and I would highly recommend getting a dual US/UK qualified accountant to do your taxes if you move here.

london is more expensive, without a doubt. this is true of food, eating out and the general consumer goodies we all use. i do think you tend to get more space for your money if you are renting.

i transferred to london from nyc with an american company. i was paid out of the us for the first 6 months. in general i have found that the US salaries are higher. i was paid a lot more than my london counterparts. so in that regard, getting paid out of the states was great. be sure to check what holiday allowance you will get b.c in the UK you get a lot more holiday time and that should surely be a benefit of living over here!

having said all that the pound is so much stronger than the dollar that the benefits of being paid in dollars may be negated. can you get exact sums from your employers?

a few other points, make sure your employer handles your moving expenses and inital cost of living when you arrive. also ensure they provide for doing your US/UK taxes, because that can become expensive over time if you are having to pay accountants to handle it all.

good luck!
mimsy

Hiya!

Welcome to London!

In general -

I have many many relatives and thier friends in and around NYC, Manhattan & L.I and I know how relatively expensive it can be over there. In comparison to London?, well it depends exactly what and where in London you want and are. Manhattan equates to Central London, the heart of the city, all the career people and all the nightlife and glitz of city life. I'd estimate London is around 25-60% more expensive that Manhattan in this respect. The 25% figure is probably related to more mundane items, groceries, clothing and up to 60% for things like Fuel, housing, utilities costs etc. Of course, those figures can vary for individual elelments!

US salaries for the same job are substantially higher, plus there's more of them there. Here if you look through various industry specific publications and those which include job advertisements, you can thumb through and almost see the 'amount' of high paying jobs compared to lower paying ones. There's not 'that' many in the higher bracket!

As an example, I'm in the IT industry and worked for 2 large US IT companies (made redundant from both!) and theres a weekly IT publication that has a job section. It has little league tables (almost) and an interesting one is '%age of adverts in IT with salaries from 0-20K - 20K-30K 30-50K and over 50K, highest percentage was in the 20-30 K range and a very small amount in the over 50K section!

Industries which seem to buck this trend seem to be anyone invloved in Law, Medicine and Finance (from my observations - theres probably other areas as well of course) - but then when you compare those to the equivalent pay in the US prepare fo your jaw to hit the ground.

London really can be alot more expensive that Manhattan, but again, depends where you are - like for like, then yes be prepared to be shocked!

The US/Sterling rate is a little more attractive for USA people right now, but like mimsy says, the effect may be negated when it comes to how much is in yer paycheque each month and having to live in London!

Do yer sums first is basically the first step !

Cheers! Dennis! West London & Slough UK!