Working for a US company as a freelance contractor

ITGuy1

Hi Everyone,

I don't know where to ask the question, but here seemed to be the best place to do it. I am doing some work for a US company but I don't know how to deal with the tax.

I will be paid in US dollars, so I need a $ account, but what the heck do I do with the tax. It isn't some small company that I can say "stick it in paypal" and the amounts going through will be about $1000 a month. It isn't my main job, which I suspect makes it even more sort of a grey area.

Where to even start ? Ideas welcome

gb12345

ITGuy1 wrote: »

but what the heck do I do with the tax. It isn't some small company that I can say "stick it in paypal" and the amounts going through will be about $1000 a month. It isn't my main job, which I suspect makes it even more sort of a grey area.

Where to even start ? Ideas welcome

Ringing HMRC would probably be a sensible starting point.

I am sure they will tell you how the $ amount should be converted to £ for your self-assessment form.

antrobus

ITGuy1 wrote: »

...Where to even start ? Ideas welcome

Contact HMRC, register for self-employment, complete a self assessment return. Converting your dollar income into GBP is simply a matter of arithemetic.

Mistral001

Just exactly the same as if you got paid by a Uk company, except it is in dollars. Your bank will convert it to £'s at the current conversion rate plus commission.

springer211

These are for import and export, you need to phone HMRC to find out if they apply to your case as well.
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_RatesCodesTools&id=EXRATES_2012

Moosk

Tax this UK should be pretty straight forward (I am assuming it is a service you are offering and we're not talking about any import/export tax) as this will just be included with your income on your normal self assesment.

However depending on the clasification of the work you are doing, and therefore if US Tax is deducted at source, you may need to fill out some forms for the IRS to exempt you from this as a non-US citizen (eg W8-BEN), else you may end up paying tax twice. However as a first port of call, the company you are working for should be able to advise you if this is applicable to the work you are doing or not.

Brassedoff

I contract every month in the USA, I also employ resellers too so have it both ways.

I have to pay tax to the IRS, but those who are my resellers outside the USA just tick the certificate that the employer should give you confirming you are a non US citizen and that you will not be spending that money in the US (hard to track I know, but hey-ho).

The IRS require the employers in the US who employ non-US national abroad to have the forms filed within 28 days.

antrobus

springer211 wrote: »

These are for import and export, you need to phone HMRC to find out if they apply to your case as well.
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_RatesCodesTools&id=EXRATES_2012

Technically speaking, foreign income "should be converted to sterling at the rate of exchange that applied at the time when the income arose". However, even HMRC's own Foreign notes for SA tell you to go and look up the published VAT exchange rates if you don't know what that is.

http://www.hmrc.gov.uk/worksheets/sa106-notes.pdf