Which is the simpler route?

My husband and I are dual citizens (both UK born) but have been living in the States for the last 16 years. We are permanently returning to the UK next year.

My question is, as far as taxes are concerned would it be simpler for him to keep his job in the USA but work from the UK, or look for a new job in the UK?

At the moment he will be laid off next year, but there is a small chance the company will keep him on and allow him to be UK based, if he applies for a different job within the organisation.
We would have to keep a US bank account open in order for him to be paid here, and would then have to draw on it to live on in the UK.
Would we have to file UK taxes even if we have no income in the UK or would this be considered a UK income?

We will be selling our house before we go, so would working for a US based company paying salary in the US  mean we're still considered resident, despite permanently living in the UK?

Or would it be easier just to leave the company and find a job in the UK?!

My husband and I are dual citizens (both UK born) but have been living in the States for the last 16 years. We are permanently returning to the UK next year.

My question is, as far as taxes are concerned would it be simpler for him to keep his job in the USA but work from the UK, or look for a new job in the UK?

At the moment he will be laid off next year, but there is a small chance the company will keep him on and allow him to be UK based, if he applies for a different job within the organisation.
We would have to keep a US bank account open in order for him to be paid here, and would then have to draw on it to live on in the UK.
Would we have to file UK taxes even if we have no income in the UK or would this be considered a UK income?

We will be selling our house before we go, so would working for a US based company paying salary in the US  mean we're still considered resident, despite permanently living in the UK?

Or would it be easier just to leave the company and find a job in the UK?!

Whilst I can't comment on whether you'll find a job in the UK, and whether it will pay as much as your US job, I can comment on the tax situation. The advice is based on the information you've provided.

1) As US citizens, you'll still have US filing requirements, wherever in the world you live. You'll also have to pay tax, although this will be offset by UK tax which you'll be paying, and/or by taking advantage of the Foreign Earned Income Exclusion. This makes no difference whether your employer is UK based or US based.

2) As a UK resident, you'll be taxed on all income. Again, this won't make a difference if your employer is UK based or US based.

3) Since you are coming to the UK for more than 5 years, you'll leave the US Social Security System, and enter the UK National Insurance system. Again, this won't make a difference who your employer is, however, if your employer is UK based, he'll have to make the deductions, and you'll receive your pay net of tax and NI contributions. If you're employer is US based, you'll have to run your own payroll, known as a DPNI/DCNI scheme. If you do carry on with the US employer, you'll have to get them to stop deducting Social Security, under the totalization agreement.

4) Unlike the US, most people in the UK do not need to file a UK tax return. Unless you are self-employed, have capital gains, or foreign income, you probably won't need to file a tax return unless HMRC asks you to. If you continue to work for the US employer, it is quite possible that you'll need to file a UK return, to ensure that tax is deducted properly.

5) Owning property does not change your residency in the US - all US citizens are taxable anyway. Ditto for receiving US wages. Depending on your state, it may be harder to become non-resident in the State - CA, NM, SC and VA are notoriously difficult to become non-resident.

2) As a UK resident, you'll be taxed on all income. Again, this won't make a difference if your employer is UK based or US based.

I don't think this is quite accurate. If you are resident in the UK but not domiciled your foreign income can be taxed on a remittance basis

If the OP and spouse are UK citizens, born in the UK and return to live permanently HMRC will probably consider them to be ordinarily resident and domiciled in the UK and will tax theiri worldwide income on an arising basis.

I don't think this is quite accurate. If you are resident in the UK but not domiciled your foreign income can be taxed on a remittance basis

If the OP and spouse are UK citizens, born in the UK and return to live permanently HMRC will probably consider them to be ordinarily resident and domiciled in the UK and will tax theiri worldwide income on an arising basis.

I'm afraid you're mistaken. A non domiciled individual can elect the remittance basis only on work performed wholly outside the UK. A UK resident working in the UK for a foreign employer is always taxed on the arising basis even if they're non domiciled.

See http://www.hmrc.gov.uk/manuals/rdrmmanual/rdrm31120.htm

The meaning of relevant foreign earnings depends on the individual’s residence and domicile status. So ‘relevant foreign earnings’ has two possible meanings (ITA07/s809Z7(3)).

1. R/OR but Non-Dom: Chargeable overseas earnings - ITEPA03/s22
These are the relevant foreign earnings of individuals who are:

resident and ordinarily resident in the UK (R/OR) but
not domiciled in the UK
and that arise from an employment that is:

with a foreign employer, i.e. an employer who is not resident in the UK and
for duties performed wholly outside of the UK
Refer to Employment Income Manual EIM40102 for further details

I'm afraid you're mistaken. A non domiciled individual can elect the remittance basis only on work performed wholly outside the UK. A UK resident working in the UK for a foreign employer is always taxed on the arising basis even if they're non domiciled.

See http://www.hmrc.gov.uk/manuals/rdrmmanual/rdrm31120.htm

The meaning of relevant foreign earnings depends on the individual’s residence and domicile status. So ‘relevant foreign earnings’ has two possible meanings (ITA07/s809Z7(3)).

1. R/OR but Non-Dom: Chargeable overseas earnings - ITEPA03/s22
These are the relevant foreign earnings of individuals who are:

resident and ordinarily resident in the UK (R/OR) but
not domiciled in the UK
and that arise from an employment that is:

with a foreign employer, i.e. an employer who is not resident in the UK and
for duties performed wholly outside of the UK
Refer to Employment Income Manual EIM40102 for further details

I think this points out the need for specificity when it comes to taxation. Residency AND domicile AND the nature of the income, gains etc are going to determine how they are taxed. When I said foreign income I should have specified where the work was being done.

But for the OP this isn't really relevant as being OR and presumably domiciled in UK their worldwide income, gains etc. will be taxed by HMRC and as they are US citizens it will also be taxed by the IRS.

Practically this is what I think this means for the OP.

1) Sell the house and take the gains before you move to the UK and become UK resident and domiciled for tax purposes so you just have to deal with CGT in the US.
2) Selling your house and becoming OR and domiciled in UK will be enough for most states for you to become Non-resident in that state......however, if you earn income in a US state, that will be state sourced income and you'll have to pay tax on it as a non-resident. You should check the exact situation for your particular US state or states.
3) For the IRS and HMRC whether you work for a UK or US based company won't make a difference as you will be subject to tax on your worldwide income by both.
4) If you do work in the UK for a US employer without any UK representation you might have to withhold NIC and PAYE yourself. This will be instructive.
http://www.hmrc.gov.uk/nic/work/embassy.htm

I think this points out the need for specificity when it comes to taxation. Residency AND domicile AND the nature of the income, gains etc are going to determine how they are taxed. When I said foreign income I should have specified where the work was being done.

But for the OP this isn't really relevant as being OR and presumably domiciled in UK their worldwide income, gains etc. will be taxed by HMRC and as they are US citizens it will also be taxed by the IRS.

I started off my answer by saying: "the advice is based on information provided" by the OP. The OP clearly implied that the work will be performed in the UK. Thus, bringing up such matters as domicile and remittance does nothing but confuse the OP.

I started off my answer by saying: "the advice is based on information provided" by the OP. The OP clearly implied that the work will be performed in the UK. Thus, bringing up such matters as domicile and remittance does nothing but confuse the OP.

Sure, I think we have both helped the OP understand their situation

Thank you for all your replies.
Although it doesn't take much to confuse me where tax is concerned, you have helped clarify the situation, especially nun, thank you.