US-UK Self-Employment Taxes & Spouse Visa Confusion

I sent this to an accountant I consulted. Easier to paste here then rewrite. She scratched her head (proverbially) and recommended I contact a big firm. I'm in Cardiff, Wales, and have been unsuccessful landing a permanent job. My husband of 10 years is currently in TX. Thanks for your help!

SITUATION
1.   I need to sponsor my husband’s spouse visa. I am a dual U.S./UK citizen. It requires showing an income of at least £18,600 per annum. This can be proven:
a.   6 months of payslips from a regular employer – NOT QUALIFIED (no regular job)
b.   Tax returns showing 12 months of self-employment in the relevant financial year.
c.   Non-employment income such as rent.

2.   We have been living here since late September 2019 using our savings, my limited self-employment income (sole trader) and the little bit of supply teaching I was able to do in March 2020 before lockdown. We also have a tenant in our home in Houston since December 2019.

3.   I have not registered as a sole trader or LLC in the UK or paid taxes but have paid NI through the supply teaching agency. Client payments currently go to our U.S. bank account, and then I transfer the money to our joint Halifax account here.

4.   I HAVE filed U.S. 2019 joint tax returns and received a refund and the $2400 US government stipend in April 2020.
 
5.   Self-employment income
a.   7 April to 31 December 2019 – declared in US taxes, not UK, with a lot of expenses. We received a hefty tax refund, in fact.
b.   2020 income – not declared in either country yet, currently approximately $8,000 or £6,300.

6.   Rental income – included in US taxes, not UK

7.   Other income – Jim is currently in Texas on a self-employed arrangement. We have money in mutual funds, both retirement and non-retirement accounts, which does not count toward the spouse visa financial requirement.

QUESTIONS
1.   At what point do I start paying UK sole trader taxes? Should I register as a sole trader on the HMRC site from that date?

2.   Do I have to pay UK taxes on our US-based rental income and investment dividends, if it is included in our US tax returns? For US tax purposes, I qualify for the foreign income tax exclusion in 2020 because I am domiciled in the UK. My husband will not because he had to return to the States to work.

3.   Do I treat the income I receive in the US and transfer to the UK as UK sole trader income for tax purposes and pay UK tax on that? This income was earned while resident in the UK.

4.   I want to change to a Transferwise borderless account for my income, which basically gives me a US bank account number and a UK account number in one “borderless account”. My husband’s US-based income would go to our US current account. Would this arrangement better facilitate my paying taxes in the UK than how we’re currently mixing UK-based & US-based income?

Thanks!

I sent this to an accountant I consulted. Easier to paste here then rewrite. She scratched her head (proverbially) and recommended I contact a big firm. I'm in Cardiff, Wales, and have been unsuccessful landing a permanent job. My husband of 10 years is currently in TX. Thanks for your help!

SITUATION
1.   I need to sponsor my husband’s spouse visa. I am a dual U.S./UK citizen. It requires showing an income of at least £18,600 per annum. This can be proven:
a.   6 months of payslips from a regular employer – NOT QUALIFIED (no regular job)
b.   Tax returns showing 12 months of self-employment in the relevant financial year.
c.   Non-employment income such as rent.

2.   We have been living here since late September 2019 using our savings, my limited self-employment income (sole trader) and the little bit of supply teaching I was able to do in March 2020 before lockdown. We also have a tenant in our home in Houston since December 2019.

3.   I have not registered as a sole trader or LLC in the UK or paid taxes but have paid NI through the supply teaching agency. Client payments currently go to our U.S. bank account, and then I transfer the money to our joint Halifax account here.

4.   I HAVE filed U.S. 2019 joint tax returns and received a refund and the $2400 US government stipend in April 2020.
 
5.   Self-employment income
a.   7 April to 31 December 2019 – declared in US taxes, not UK, with a lot of expenses. We received a hefty tax refund, in fact.
b.   2020 income – not declared in either country yet, currently approximately $8,000 or £6,300.

6.   Rental income – included in US taxes, not UK

7.   Other income – Jim is currently in Texas on a self-employed arrangement. We have money in mutual funds, both retirement and non-retirement accounts, which does not count toward the spouse visa financial requirement.

QUESTIONS
1.   At what point do I start paying UK sole trader taxes? Should I register as a sole trader on the HMRC site from that date?

2.   Do I have to pay UK taxes on our US-based rental income and investment dividends, if it is included in our US tax returns? For US tax purposes, I qualify for the foreign income tax exclusion in 2020 because I am domiciled in the UK. My husband will not because he had to return to the States to work.

3.   Do I treat the income I receive in the US and transfer to the UK as UK sole trader income for tax purposes and pay UK tax on that? This income was earned while resident in the UK.

4.   I want to change to a Transferwise borderless account for my income, which basically gives me a US bank account number and a UK account number in one “borderless account”. My husband’s US-based income would go to our US current account. Would this arrangement better facilitate my paying taxes in the UK than how we’re currently mixing UK-based & US-based income?

Thanks!

Hi ebmiceli, welcome to the forum. 

I'm coming at this from the a visa perspective and would suggest that you post again in the visa forum. https://talk.uk-yankee.com/index.php?board=17.0
 For now though can you clarify if this is correct?
You are a dual US/UK citizen.
Your husband is a USC.
You moved to the UK in September 2019 to try to meet the financial requirements of the spouse visa.
Your husband came with you as a visitor but has since returned to the US.
Before September 2019 you were both living in the US.

There is a whole lot more to the self employed category than just a years tax returns so it's much better to use another way of meeting the financial requirements if you can.

While you can't combine self employment income and savings, you can combine savings with non-employment income so depending on how much rental income you have and how much in the way of savings, you may be able to meet the requirement that way.

Thanks! I'll repost in visa. You understand our situation perfectly. Unfortunately, I have been unable to get a permanent job here despite many attempts. I've only been able to continue with remote freelance work and PAYE supply teaching (curtailed by lockdown).