Starting a limited company in the UK

Hi All,

I hope this is the right place to post this question.  My husband and I recently got married and I came to the UK on my spousal visa shortly before COVID-19 kicked off.  Before I moved I was living in Ohio, had my own LLC and was doing some work for an architecture firm.  I had prior connections in London as I had lived here before and thought I'd be able to get a job quite easily.  Which was the case, until everyone went on a hiring freeze awful timing for me.  I've stayed in touch with the architecture firm in Ohio, and they would like me to keep doing work for them.  They offered this before I left, but I thought this would be too tricky to sort out - legally/ tax wise/ visa wise etc. and I was just so over doing paperwork after the spouse visa haha. Buttttt of course life has completely changed, and it'd be great to keep working for them.  They have no intentions of opening up a presence in London, so I think that means my only option is opening up a limited company here.   Does anyone have any experience with this or any advice/tips? I'm planning on reaching out and getting some legal advice on this as well.  TIA!!

I can't comment on whether or not you need a limited company for this, but setting one up is easy.

https://www.gov.uk/set-up-limited-company

I don’t have any advice, but I’m in a similar situation. I have just begun talking with an accountant about the tax implications of setting up as either a sole trader or limited company in the UK and taking clients in both the UK and US. I’m setting up a phone call with them, hopefully next week, and can let you know what I find out!

@Mmmkay

I just saw your post! Yes, I would greatly appreciate if you could share any insights from your call!! Hope it goes well this week!!

@Mmmkay

Just wanted to follow up and see if you had your call yet?  Any info you learned would be greatly appreciated

Hello!

Sorry I took so long to respond! I did have that call and have decided to work with these accountants, they seem really good.  I'd be happy to DM you their name if you're interested. Unfortunately, I'm still a bit confused about the complexities of being a UK Ltd and working with US clients and have been having some email follow ups trying to get it all cleared up. It's not directly related to your situation, but they have told me that as a UK company, I can hire a US contractor through Upwork without complicating anything. Maybe you could look into the reverse of this and see if your US company would be willing to hire you through Upwork? I have a friend in the States who has hired freeancers this way and said it hasn't caused any tax problems because the US company would just pay Upwork who then pay the UK contractor, rather than the US company paying the UK person directly. However, I'm not sure if being an expat complicates that process.

This isn't directly helpful to you, but might still be useful knowledge. Apparently it's not hard to be sole trader or Ltd company here if you are only working with UK clients. That'll run you about $1100-1300 yearly for both US and UK taxes. What I'm still getting clarification on is how that is effected by working with US clients. The first answer I got sounded pretty complicated; basically the UK counts a Ltd co as a business and the US counts an LLC as a person, so tax laws get really mucky because of that. However, I've just realized I may have misread an email and I think the complication may actually just depend on where you are physically doing the work instead of where your clients are located? I just emailed them back this morning and hopefully will hear soon.

Sorry I don't have a better answer yet, I will keep you updated! Hopefully some of this info was at least a little helpful 

Don't know if it helps, but I work freelance, and have gone back to the states every year for the past 4 years and worked for a month at my former employer's. They have me on a W2 as I am a former employee. I just report the income on my Self Employment assessment  every year. I work as a sole trader, not an LLC.

Ok I spoke with my accountant today and got clarification for my situation, I hope it helps you! If I am a sole trader, I am able to work for US clients and also contract people from the US as long as I am physically in the UK when doing all of the work. It doesn't add any complexity to my taxes, but I had already hired them on the basis of needing to do business taxes, so I'm not sure how it changes them from a regular return.

If I were to become a limited company, then I'd have to set up as an official company and pay myself via dividends or salary. This makes US taxes complicated since an LLC would be taxed as a person in the US. We didn't get too far into this option for now, but I think it involves having to incorporate in the US as well which makes taxes and legalities complicated.

My guess based off what they told me is that you'd be good to take contract work for the US company if you're a sole trader, it might just mean some extra business tax forms. But I'm not an accountant and have learned through this whole process that it is a big ol' barrel of confusing, so it may be worth consulting with one to save yourself a future headache!

Thank you so much!! This is all super helpful!!

It definitely sounds like sole trader is the way to go! @Mmmkay I'm going to dm you!