Anyone here self employed in the UK ?

Hi All, planning a move next year US-UK (I'm a dual citizen) and one possible option might be to continue working for the small company in the US that I work for now (remotely as a computer programmer).

The thought is to set up as a sole trader self-employed in the UK, pay my UK taxes, file US returns (of course) and then use the social security treaty with the UK/US to avoid paying both UK national insurance AND US social security self employment tax (15 % - aarrgh).

Is anyone in a similar position who could offer advice on whether my ideas have basis in fact, or if I'm overlooking something fundamental,

Many thanks

sean

Hi Sean,

You are basically correct in your thinking. As long as you are performing the work outside the US, and properly paying SE taxes to the UK, then you should be able to exclude yourself from SE taxes in the US.

You will however have to obtain a certificate of coverage from the UK and include that with your US return. This certificate will exclude you from paying SE taxes again to the US.

If you would like more information on being self employed abroad, I think the following articles will be very useful:

http://www.greenbacktaxservices.com/blog/tax-tips-for-self-employed-us-expats/

http://www.greenbacktaxservices.com/blog/self-employment-business-taxes-for-expatriates/

I hope this helps!

From what you are saying it is quite likely you will be employed rather than self-employed.

Sounds like a very similar situation I'll be in soon... with a little twist.  I'm Canadian-American computer programmer.  I plan on leaving my current US based job and go self-employed when in the UK because I can do some independent contract work coming out from Canada for now at least.  I usually do my own taxes, but I'll have to check out those links, btw thanks and start researching things.  I'm assuming US-Canada-UK all have tax treaties regarding taxes and retirement and hopefully won't be double taxed and/or lose benefits.

Thanks Greenback.

Re employed vs self employed that would be up to how my employer would want to handle it, but as a very small outfit (< 10 people) I think they'd rather treat me as a non-employee who invoices them periodically for work done.  We'll see.

You are welcome- I hope the links help

In the end it is up to your employer. It would certainly be easiest on them to have you set up as an independent contractor... However, if it were up to you, you would likely be better off as an employee (no SE taxes that way).

Either way, good luck!

You are welcome- I hope the links help

In the end it is up to your employer. It would certainly be easiest on them to have you set up as an independent contractor... However, if it were up to you, you would likely be better off as an employee (no SE taxes that way).

Either way, good luck!

This is a common fallacy and simply wrong under English law. If this is an "employer" it is more likely than not that you are employed under local law within the UK. This would be good news for you because you get all of the benefits of local law such as a written contract, minimum wage, paid holiday, maternity/paternity leave, auto-enrolled pension plan etc.

Your employer might have to deal with issues such as an international payroll, registration with Companies House, UK corporate tax filing and VAT.

You might want to look (and have your employer look) at HMRCs website:
http://www.hmrc.gov.uk/employment-status/

Guya, I guess the way around that is to set up your own limited liability company of which you are the sole employee and have your company invoice your former supplier.

There has to be a way to do this because when I used to work (in software) in the UK there would be contract programmers sat at the desk next to mine using company computers, supplies, working 40 hour weeks, but being paid directly to their limited liability companies, and with no annual paid vacation etc.

That's why the UK has IR35 rules and the US have Subpart F rules to deal with this kind of structure.