Dual Citizen, working in UK for a US company w/out UK presence

I hope I'm not beating a dead horse, but I've been reading the forum most of the day and am still short of an answer.

Scenario:
I have dual US & UK citizenship.  Living in the UK.  I have been asked to work for a US company with no UK presence.  It's a very small company run by, so there will be no contracts signed, etc.  We're trying to figure out the best way to pay me with the most advantageous tax implications for both the company and myself. 

I'm hoping for some help in regards to what would be the most advantageous route to take.  I'm quite clueless as how to proceed.

If anyone has any advice, or better yet a referral to a professional that could help out (preferably based in London), that would be fab.

Thanks in advance!

An interesting scenario for sure, and I don’t know the answer to the question. I would have thought that FEIE was for income from a foreign company and that a 1099-MISC being issued by a US company would not be counted as foreign earned income just because it was paid to a contractor living abroad.

this may be wrong but this is how i see it working. someone more knowledgeable may dispute this.

Usually income is sourced where it is earned. primary taxing rights fall to the country of residence under the US/UK treaty so (presumably) the UK.  If you are working for a US company, being paid locally, you should be able to qualify for the foreign earned income exclusion or foreign tax credit.  so you could be paid as freelance by the US company,  and the self employment tax, the "totalisation agreement" with the US/UK, you can get out of US self-employment tax.. you file in the UK, but pay tax to the UK.

The best approach is to be a contractor and bill the foreign company for your time. I'm sure they don't want to deal with the employment regulations and payroll taxes of a UK resident employee if they are a small cpamy


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The best approach is to be a contractor and bill the foreign company for your time. I'm sure they don't want to deal with the employment regulations and payroll taxes of a UK resident employee if they are a small cpamy


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How would that work? I'm a contractor for a US company (small) with no UK presence, and the company I am contracted to asked me to remain on part time while I move because their work load is so non-stop and I'm the most qualified person to keep doing it (and I appreciate the income!)

I need to follow up with HRMC, I keep missing their times open to call and their webservice is never available, but I was hoping I could still be paid in USD and then file my taxes in the UK (with a conversion based on the exchange rate of my paydays), and pay taxes to the UK. I haven't been able to find any clear guidance either.

@dhouse did you get anywhere with this, or find someone versed enough to provide advice for a fee? I haven't had luck finding anyone versed in this and internet searches have been futile. My US employer has asked me to fill out a new w-4 but it only allows you to choose exempt if you had no tax liability the previous year. Since I was a US resident of course I had tax liability there, but now the taxes have to go to the U.K. in 2018.


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Your US based employer has obligations under English law that it cannot avoid, such as auto enrollment for pensions, paid holiday, employment contract etc.  Your employer may also have UK corporate tax and payroll obligations.  Ask your employer to share with you copies of the advice that they will have received from their own advisers.