U.K. Freelance invoicing U.S.

Savvy_Sue

Lots of help if you Google, as tiger_eyes says not as difficult as it sounds

Barry_Spock

DullGreyGuy said:

W8 is a collection of IRS forms used by foreign individuals/entities to validate they are not US based for certain income classes which are being earned in the US. Failure to complete it may result in 30% of monies being withheld by the IRS

I notice the W8 form is only to be shown to the payer in the US and not the IRS so how do they come down on anyone for not producing it if they never see it?

Barry_Spock

tiger_eyes said:

My experience is a little out of date, but about a decade ago I had to call the US IRS to get an Employer Identification Number (EIN) and complete a form called the W8-BEN in order to get my book royalties from Amazon US without them withholding money for US taxes. I'm also a UK freelancer with US clients and on the rare occasions anyone asks about my tax status, the EIN and W8-BEN keeps them happy too. I think the Individual Taxpayer Identification Number (ITIN) is another acceptable alternative, but that might also require calling the IRS. I think the process was free? It wasn't as difficult as it sounds.

Thank you - very useful.

tiger_eyes

Barry_Spock said:

DullGreyGuy said:

W8 is a collection of IRS forms used by foreign individuals/entities to validate they are not US based for certain income classes which are being earned in the US. Failure to complete it may result in 30% of monies being withheld by the IRS

I notice the W8 form is only to be shown to the payer in the US and not the IRS so how do they come down on anyone for not producing it if they never see it?

I'm not an expert on US tax law so please take this with a grain of salt, but I believe that US companies are obligated to not only report to the IRS what income they pay to third parties (that's you), but also to ensure you're paying taxes to the IRS as appropriate. My understanding is that the UK and US have a tax treaty that states that UK citizens can pay tax to the UK and not the US in certain situations, so the appropriate tax is in fact 0%, but your client needs your W8-BEN to prove that's the case. Otherwise, they are obligated to keep 30% of your salary and pay it directly to the IRS.

I would strongly recommend you comply with their request, especially if you plan to keep working with US clients. You will not need to invest this time and effort for every invoice, or even for every client. You just need the one W8.

Barry_Spock

tiger_eyes said:

Barry_Spock said:

DullGreyGuy said:

W8 is a collection of IRS forms used by foreign individuals/entities to validate they are not US based for certain income classes which are being earned in the US. Failure to complete it may result in 30% of monies being withheld by the IRS

I notice the W8 form is only to be shown to the payer in the US and not the IRS so how do they come down on anyone for not producing it if they never see it?

I'm not an expert on US tax law so please take this with a grain of salt, but I believe that US companies are obligated to not only report to the IRS what income they pay to third parties (that's you), but also to ensure you're paying taxes to the IRS as appropriate. My understanding is that the UK and US have a tax treaty that states that UK citizens can pay tax to the UK and not the US in certain situations, so the appropriate tax is in fact 0%, but your client needs your W8-BEN to prove that's the case. Otherwise, they are obligated to keep 30% of your salary and pay it directly to the IRS.

I would strongly recommend you comply with their request, especially if you plan to keep working with US clients. You will not need to invest this time and effort for every invoice, or even for every client. You just need the one W8.

Thank you so much. I've filled it out but one section asks for an ITIN which appears to be a number you need if you're not a US citizen with a social security number, so looks like i need to also fill out a W7 form. I presume i do this (it says i have to post it to the US, not send online so i may be in for a long wait before i can invoice my clients)?

tiger_eyes

Barry_Spock said:

Thank you so much. I've filled it out but one section asks for an ITIN which appears to be a number you need if you're not a US citizen with a social security number, so looks like i need to also fill out a W7 form. I presume i do this (it says i have to post it to the US, not send online so i may be in for a long wait before i can invoice my clients)?

Yes, you'll need a number. When I dealt with this back in 2014-ish, I was able to call the IRS from the UK and get an Employer Identification Number (EIN) rather than the Individual Taxpayer Identification Number (ITIN). (I qualified for the EIN because I was/am self-employed - you don't have to have employees other than yourself.) I think they gave me the EIN immediately over the phone and also sent me a letter.

I notice that you can still call the IRS to get an EIN as a foreign citizen (scroll down to the part about international applicants), but it's been so long the procedure may have changed. You may need to reach out to a professional organisation or industry group in your field to get up-to-date advice - you can't be the only freelancer working for a US company. Good luck fending off the IRS!