Tax as a Brit working in Britain for an American company

[AntoinetteCosway]

I've been on the government's tax pages and come away very confused. Can anyone help?

I've been offered a job working as an Associate for a very small American company. I would be working in the UK, from home. I'm British. I would be self-employed.

This is a big career change for me as I have previously been doing something completely different and always on PAYE.

My question is, do I set up as self-employed in this country, fill in a tax return at the relevant times and that's that? Or do I pay the American government tax instead? Or both? I know these are probably stupid qus but I've never had to think about this stuff before and I don't really know where to start. I need a dummy's guide!

You will pay British tax. Lots of companies are foreign owned and their staff who work in Britain pay British tax. I don't think you need to pay any american tax as you aren't american and you aren't working in America.

Self assessment can be complex and lots of people pay an account to help with their tax return or you can fill the tax return in online.

you will pay UK tax as you are working for them in the uk.

If you are working abroad for them in the us it may be that you would need to fill in both US and UK returns and claim credit for tax suffered in the US on your UK tax return

But just be careful and make sure you are actually self employed

Will you be just working for other companies, will you be able to set your own hours, can you send a substitute?

If you answer no to these, it may be that you are not actually self-employed but employed and liable to tax under PAYE still.

I would contact a qualified tax adviser as this area can be very tricky and there has been lots of case law in relation to it.

I would be able to work for other companies( but I won't be actually doing so as I want to be part time) and I will be setting my own hours. I'm not sure what you mean about sending a substitute? Sorry to be dense.

hi there

basically it would mean being able to send someone else in your place if you were unable to do the work.

I would really advise that you contact an accountant to assist you in this matter.

HM Revenue & Customs could look at the situation where you are doing no work for any other companies (do you have to work to their hours or can you work your own hours) and could calculate that you are a deemed employee and calculate your income on the PAYE rules (including Class 1 National Insurance)

I can work my own hours, but yes, I'm not planning to work for any other companies...hm. Thanks so much for your help, will def talk to an accountant too!

Are they planning to pay you from the US? If so you will have 30% US Withholding Tax deducted from the payments, and still have UK tax to pay: this obviously won't work.

The US didn't get to be the biggest economy in the world by allowing free trade.

You mean from a US bank account? I don't actually know...

Is there not provisions in the double tax treaty whereby this can be reclaimed?

And an application could be made for a reduced rate as its provision of personal services not dividends?

OP - as i said earlier you need to find a qualified tax adviserto get you through this minefield.

Will do, thanks for all advice.