Moving to US Contractor Status for Work, What About Taxes?

My US wife has been working for the same company in the US for about 5 years now. She was recently granted a visa to come live in England with me and her work has expressed firm interest in keeping her on as a remote worker.

Currently, our plan is to have them pay her wages into a US-based bank account and then use Transferwise to convert and send these to a UK/GBP bank account. Is this the best way to go about doing this, or is it likely to cause her problems come tax-time?

She'll be switching from employed to independent contractor.

You'll want to seek advice on this. It's more complex than just switching status with the employer because of how contracts work here in the UK.

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The engager of the work will want its own legal advice on its obligations under employment law, corporate tax, withholding etc. I'd suggest you ask the engager of the work to share that advice with you. 

You'll want to seek advice on this. It's more complex than just switching status with the employer because of how contracts work here in the UK.

How so? Couldn't she simply register as self-employed in the UK and have her company as a client for that business?

Ahhh, don't we all wish. 

How so? Couldn't she simply register as self-employed in the UK and have her company as a client for that business?

Check out here: https://www.gov.uk/employment-status/selfemployed-contractor

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

- they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
- they can decide what work they do and when, where or how to do it
- they can hire someone else to do the work
- they’re responsible for fixing any unsatisfactory work in their own time
- their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
- they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
- they can work for more than one client

From what you say these things are not true. Her employer has the obligation to determine her status with HMRC.

While I would not suggest disregarding the law, it's worth noting that there are at a minimum tens of thousands of people working on a contractual basis throughout all industries in the UK who would fail the majority of those tests, and enforcement has been fairly rare and random to date, though at higher levels than in past years. If you are not keeping money within your business and are instead paying income tax on it, I'm not sure there would be much of a difference from the PAYE rates. Does anyone know what the consequences would be if your contract were scrutinized and determined not to be IR35-compliant?

I'll throw in that there are organizations that can conduct a review to help determine if this position is within IR35 and offer insurance against any problems with HMRC.

Google QDOS

Would the IR35 rules even apply if she's working for a US company without establishing a UK company? I hadn't thought about this situation before.

I have a semi-similar situation, only way more confusing.

Spouse is a UK citizen green card holder. We moved to the UK last March/April. Spouse has recently been hired as a contractor/independent consultant for a US company, and is doing other work in the UK as well as an independent consultant. Idea is to work as a sole trader initially. Our bank doesn't allow international wires, and in an eagerness to get paid for the US work for right now, we are putting down our US bank. Instead of a W8, we are supplying a W9 (since a green card holder). I honestly don't know what to do at this point. We didn't apply for US citizenship for spouse due to the immediacy of our move, and were concerned about tax implications of doing so. Moving back to the US is not out of the question, however, we are not in a rush to do so.

Any advice?

I have a semi-similar situation, only way more confusing.

Spouse is a UK citizen green card holder. We moved to the UK last March/April.

My understanding was that if you moved out of the US (permanently/ semi-permanently), you had to return the green card? Is this no longer the case?

My understanding was that if you moved out of the US (permanently/ semi-permanently), you had to return the green card? Is this no longer the case?

There is a bit of an extension.

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I have a semi-similar situation, only way more confusing.

Spouse is a UK citizen green card holder. We moved to the UK last March/April. Spouse has recently been hired as a contractor/independent consultant for a US company, and is doing other work in the UK as well as an independent consultant. Idea is to work as a sole trader initially. Our bank doesn't allow international wires, and in an eagerness to get paid for the US work for right now, we are putting down our US bank. Instead of a W8, we are supplying a W9 (since a green card holder). I honestly don't know what to do at this point. We didn't apply for US citizenship for spouse due to the immediacy of our move, and were concerned about tax implications of doing so. Moving back to the US is not out of the question, however, we are not in a rush to do so.

Any advice?

You could use a service like Transferwise to wire the money from your US bank to your UK bank. It will also be cheaper than doing a bank  forex wire transfer.