Employed By US Company In UK

Radicalrooster

Hi all!

I have recently received a job offer for a role in the US. I will be working remotely from the UK and I am a UK resident.

The company have been great and said they are happy to pay me in what ever way works best for me, allowing me to 'set my self up' in the way that works best.

After my own research, some have said simply register as a Sole Trader and do a tax return. Others have said setup a Limited Company to pay PAYE. Others have warned about something called IR35.

I have emailed a few accountants but I am yet to hear anything back.

Can anyone advise what may be the best setup both in terms of being legal but also paying as little (and the right amount) of tax?

MDMD

Have you gone through the Employment Status tool?

https://www.gov.uk/guidance/check-employment-status-for-tax

It might be that you are an employee and they are required to set up a PAYE scheme. They are probably looking at it based on US rules regarding independent contractors. They should be getting their own advice too, or they could end up in a bit of a tax mess, depending on what you are doing for them.

Radicalrooster

MDMD said:

Have you gone through the Employment Status tool?

https://www.gov.uk/guidance/check-employment-status-for-tax

It might be that you are an employee and they are required to set up a PAYE scheme. They are probably looking at it based on US rules regarding independent contractors. They should be getting their own advice too, or they could end up in a bit of a tax mess, depending on what you are doing for them.

Thank you for your reply.

I have just gone through the Gov link you posted but a lot of the questions aren't applicable. I am simply a full-time employee.

They hire other people from other countries as well (I am the first for the UK) and each have different setups. My understanding was it might be possible for me to simply do a Self Assessment each year?

General_Grant

Radicalrooster said:

MDMD said:

Have you gone through the Employment Status tool?

https://www.gov.uk/guidance/check-employment-status-for-tax

It might be that you are an employee and they are required to set up a PAYE scheme. They are probably looking at it based on US rules regarding independent contractors. They should be getting their own advice too, or they could end up in a bit of a tax mess, depending on what you are doing for them.

Thank you for your reply.

I have just gone through the Gov link you posted but a lot of the questions aren't applicable. I am simply a full-time employee.

They hire other people from other countries as well (I am the first for the UK) and each have different setups. My understanding was it might be possible for me to simply do a Self Assessment each year?

If you are an employee, you are their employee and not an independent contractor.
You don't have to be self-employed to be required to complete a Self Assessment.

MDMD

Radicalrooster said:

MDMD said:

Have you gone through the Employment Status tool?

https://www.gov.uk/guidance/check-employment-status-for-tax

It might be that you are an employee and they are required to set up a PAYE scheme. They are probably looking at it based on US rules regarding independent contractors. They should be getting their own advice too, or they could end up in a bit of a tax mess, depending on what you are doing for them.

Thank you for your reply.

I have just gone through the Gov link you posted but a lot of the questions aren't applicable. I am simply a full-time employee.

They hire other people from other countries as well (I am the first for the UK) and each have different setups. My understanding was it might be possible for me to simply do a Self Assessment each year?

In that case they need to follow the correct PAYE procedures and set up a PAYE scheme (or more realistically pay someone to do it on their behalf).  They can’t avoid it unfortunately and you can’t just do a self assessment return as this won’t deal with the employers NI appropriately.

You could find a local accountant that offers PAYE/payroll services and see if they can help your employer out. They will also need to contribute to your pension, but hopefully this can be one of your choice. There are also various legal requirements they can’t avoid either.

https://www.isoscelesfinance.co.uk/employing-staff-in-the-uk-a-guide-for-overseas-companies/

Radicalrooster

MDMD said:

Radicalrooster said:

MDMD said:

Have you gone through the Employment Status tool?

https://www.gov.uk/guidance/check-employment-status-for-tax

It might be that you are an employee and they are required to set up a PAYE scheme. They are probably looking at it based on US rules regarding independent contractors. They should be getting their own advice too, or they could end up in a bit of a tax mess, depending on what you are doing for them.

Thank you for your reply.

I have just gone through the Gov link you posted but a lot of the questions aren't applicable. I am simply a full-time employee.

They hire other people from other countries as well (I am the first for the UK) and each have different setups. My understanding was it might be possible for me to simply do a Self Assessment each year?

In that case they need to follow the correct PAYE procedures and set up a PAYE scheme (or more realistically pay someone to do it on their behalf).  They can’t avoid it unfortunately and you can’t just do a self assessment return as this won’t deal with the employers NI appropriately.

You could find a local accountant that offers PAYE/payroll services and see if they can help your employer out. They will also need to contribute to your pension, but hopefully this can be one of your choice. There are also various legal requirements they can’t avoid either.

https://www.isoscelesfinance.co.uk/employing-staff-in-the-uk-a-guide-for-overseas-companies/

Many thanks for your reply.

Would the company still need to pay Employers NI if they are US based?

I have just called HMRC and they advised I fill out a P85 form, however when I looked at the form online it seems as though that is meant for people moving abroad, which I am not.

[Deleted User]

Radicalrooster said:

MDMD said:

Radicalrooster said:

MDMD said:

Have you gone through the Employment Status tool?

https://www.gov.uk/guidance/check-employment-status-for-tax

It might be that you are an employee and they are required to set up a PAYE scheme. They are probably looking at it based on US rules regarding independent contractors. They should be getting their own advice too, or they could end up in a bit of a tax mess, depending on what you are doing for them.

Thank you for your reply.

I have just gone through the Gov link you posted but a lot of the questions aren't applicable. I am simply a full-time employee.

They hire other people from other countries as well (I am the first for the UK) and each have different setups. My understanding was it might be possible for me to simply do a Self Assessment each year?

In that case they need to follow the correct PAYE procedures and set up a PAYE scheme (or more realistically pay someone to do it on their behalf).  They can’t avoid it unfortunately and you can’t just do a self assessment return as this won’t deal with the employers NI appropriately.

You could find a local accountant that offers PAYE/payroll services and see if they can help your employer out. They will also need to contribute to your pension, but hopefully this can be one of your choice. There are also various legal requirements they can’t avoid either.

https://www.isoscelesfinance.co.uk/employing-staff-in-the-uk-a-guide-for-overseas-companies/

Many thanks for your reply.

Would the company still need to pay Employers NI if they are US based?

I have just called HMRC and they advised I fill out a P85 form, however when I looked at the form online it seems as though that is meant for people moving abroad, which I am not.

Great advice - not! There used to be a P86 form but this was discontinued about ten years ago! No forms are now required with everything being dealt with through the PAYE system.