Moving to the UK and continuing work for my US firm

Hi everyone -

I've done a bit of Googling and searching this board, but am still a bit in the dark - I was hoping someone could help me. I'm getting married to a lovely lady in the UK this April and am in the process of finalizing different bits of my move. I've learned that my company wants to keep me on as a remote contractor (doing software development), and I'm trying to figure out the full implications of that. My company is about 150 people with only one office based in Manhattan.

I've tried giving the HMRC a call and they just directed me to the NI (I think because I don't have an NI number). Prior to calling the NI, I figured I'd post here first so I have an idea of the right questions to ask.

From what I can tell, I need an NI number to be employed in the UK - which I assume I can get soon after my marriage visa - does this also apply when working for a company overseas? Essentially, can I work for an overseas company while my NI number is "pending"?

Also, my company wants to keep me on as a full time employee - but from my research it seems becoming a contractor would be more beneficial (due to the fact I'd need to charge them VAT and also take out my own taxes). Does this sound right?

Lastly, I've read there are provisions to ensure people don't get taxed twice on foreign income. Would this apply to me?

Thanks in advance for all your help,

Assuming you are a US citizen you are going to be liable for US tax whether you are an employee or a contractor, and if you are resident in the UK and do the work in the UK you will have to pay UK tax.

It sounds as if your US firm does not have an office in the UK, if so it's probably easiest for you to become self-employed in the UK and bill your US company for the work you do. That will avoid the possibility of any tax or FICA being withheld. You will have to register to pay NI and PAYE in the UK and then use the FEIE or tax credits when you do your US taxes. There are "umbrella companies" that are set up specifically to provide payroll, invoicing and tax services for the self-employed.

If you were an NRA employee in the UK being paid by a company in the US there would be no FICA or US tax liability, but as you are a US citizen I'm not sure how that would effect your US tax and FICA situation as an official employee.

Thank you nun so much for your help!

Yes, I am a US citizen and hope to retain dual citizenship while I'm living in the UK. I've run across a couple of umbrella companies before in my Googling - but I can't ascertain which are reputable and which may not be. Would you be able to recommend one (or at least a listing of companies that have been pre vetted)?

Thanks again,

Thank you nun so much for your help!

Yes, I am a US citizen and hope to retain dual citizenship while I'm living in the UK. I've run across a couple of umbrella companies before in my Googling - but I can't ascertain which are reputable and which may not be. Would you be able to recommend one (or at least a listing of companies that have been pre vetted)?

Thanks again,

Sorry I can't recommend any companies, but why not post asking for others who are self employed in the UK and how they went about things. This link goes over some of the issues relating to working overseas for a US company. If you are an employee and on the US payroll you'll have to work out how to apply the US/UK SS Agreement so that you only pay in one country. You should think about how long you'll be in the UK, your current SS credits and where you plan to retire. If you get a certificate of coverage from one country you don't have to pay again in the other.
As far as tax goes if you are on the US payroll and they withhold tax you will be able to get all or most of it back by using FEIE or UK tax credits.Also Google "Tax Equalization" and talk to your HR dept about it.

http://www.protaxconsulting.com/are-you-a-us-person-thinking-of-accepting-a-foreign-assignment/

Do remember that you need a contract under English (or Scottish law) - which will give you the benefits of UK employment law (eg minimum wage, maternity/paternity pay, redundancy, notice periods and so on). Your employer will want to ensure that it has no UK corporate liability and on top of that the employer may have UK withholding tax obligations.

Ideally the employer would provide paid advice.