American contractor in the UK

April 13, 2006 9:15 AM

UKContractorFilter: I am going to be working as a contractor in the UK for a good while and the local tax laws perplex me to say the least. From this link it looks like there may be ways to reduce my UK tax liability, and/or at least make it count towards my US taxes. Surely, I am not the first one to go through this; pointers, tips, good/bad experiences?

More details: I am an EU citizen (so no visa issues), but I my corp is based out of the US, so my income flows through there. The LTD companies mentioned in the link above sound like an OK deal, but how much hassle/cost are they? and if I go that way, why not go offshore completely? any experiences there?

posted by costas to work & money (5 comments total)

You could try posting here.
posted by oh pollo! at 9:35 AM on April 13, 2006

The Inland Revenue has some info about non UK'ers.

They are also approachable/helpful, or I've always found them so, and you can ring them up to ask advice, perhaps even email now we've been dragged into the 21st century.

But the best thing about their advice is it'd be free and from the horses mouth.
posted by selton at 1:24 PM on April 13, 2006

You should speak to an accountant - but unless you are a green card holder there are huge advantages to going fully offshore. Especially if you can do the work in the UK not physically in the UK, or if as part of your job you will be travelling outside of the UK.

If you are a Green Card holder nothing really matters, as anything you don't pay in UK taxes you'll pay in US taxes I believe. But really - check with a pro.
posted by JPD at 2:00 PM on April 13, 2006

Are you normally taxed in the United States for all of your income? The EU citizen bit confuses me, but if you were a US citizen then the US could tax you, and with the tax treaty the US and the UK have, you would pay very little UK tax (or possibly none) instead paying it to the US (as the US taxes worldwide income). Of course, I am not an accountant and the above may be entirely wrong ;-)
posted by wackybrit at 1:26 AM on April 14, 2006

Actually it works the other way around - you pay UK taxes then deduct that from your US liability - but end result is the same.
posted by JPD at 5:32 AM on April 14, 2006