Remittance tax

I accepted  a position with the UK subsidiary of my American employer earlier this year. I've since been commuting between the States and the UK, but have been paid in $ by the US parent-firm. I have a significant amount of reimbursable expenses to submit to my company. I'd like to get them paid by the US firm in $, as I can get the money sooner, but will I then have to pay remittance tax if I bring the funds into the UK?

Also, we've opened an offshore account. Is there any reason one needs to have a UK-based account, or can we just use the offshore for everything (has checks, debit cards, etc.)

Thanks in advance,

Chris

There is a whole bunch of complications in your question:
1. What was your residence status in the UK since "earlier this year".  Have you been resident, non-resident or resident but not ordinarily resident?
2. Has your domicile been agreed by HMRC?
3. Do you contribute to a 401(k)?
4. What will your employer report on their P11D?
5. What effect will this have on your US federal and state tax position?
6. Did you qualify for detached duty relief or away from home deductions?

Overall your employer should help with getting you some holistic tax advice to all of these questions.

Sorry, I should have been clearer.

I was a US resident working for a US company when expenses were incurred. I will be a UK resident, not ordinarily resident, and US domiciled when I come to the UK. Will be eligible for detached duty relief.

All I'm trying to figure out is if the expenses my company is reimbursing me for will be subject to remittance tax if they are paid in $ by the US company and I subsequently bring them into the UK.


Thanks again

Chris

Chris

I think - although I am not 100% certain - that you plan to be claiming on your UK tax return that you remained treaty resident in the United States during each business trip to the United Kingdom.  Consequently all compensation relating to these business trips would be exempt from UK taxation provided that a claim is made on a UK tax return under Article 14 of the US/UK double taxation treaty.

Have you checked out the conditions of Article 14(2) to see if you qualify (if I understand correctly partial days in the UK are counted as a day in the UK for treaty purposes which may affect your interpretation of the treaty).

Does your company operate the business visitors scheme?

I realise that you are saying that "all I'm trying to figure out is...'.  However tax in the UK just does not work like that.  The best answer is to get professional advice paid by your employer (given that your presence here has had tax implications for them) so that YOU can minimise both UK and US taxes (and yes there are loads of ways YOU can save money from what you have said so far).

Might I also add that if you don't take advice, your employer might; their best interests aren't necessarily yours.  It should be you taking the advice (Smile!  It's US tax-deductable).

Your visa status will be relevant.  Work permit holders must be paying either PAYE tax (income tax + NI) or, if paid wholly or party overseas, must still be paying the equivalent amount.  I doubt that you could claim to not be ordinarily resident in the UK if you are on a work permit.

Vicky

Vicky - it is entirely normal for individuals on a work permit to be not ordinarily resident in the UK.  If you are not familiar with the rules then you may want to read HMRCs booklet IR20 http://www.hmrc.gov.uk/pdfs/ir20.pdf