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Where Taxpayers and Advisers Meet

US citizen with UK limited company doing job for US client

Millerp5
Posts:2
Joined:Thu Jul 01, 2021 5:58 pm
US citizen with UK limited company doing job for US client

Postby Millerp5 » Thu Jul 01, 2021 6:07 pm

Hello,

I'm a US citizen living in the UK, working through my LTD on freelance projects for clients usually located in UK.
On occasion I have jobs that come from the US, and I'm wondering how that is handled from a tax perspective?

Besides providing the US business with a w9 including my name and UK address and US social security number, and an invoice with my UK LTD's
bank details for payment, is there anything else I should watch out for/be aware of?

Thanks!
Pascal Miller

DavidTreitel
Posts:244
Joined:Thu Aug 16, 2012 4:31 pm

Re: US citizen with UK limited company doing job for US client

Postby DavidTreitel » Fri Jul 02, 2021 8:16 am

One assumes that the entity has elected to be disregarded to avoid SubpartF, other CFC and GILTI tax rules. Is that correct?

Millerp5
Posts:2
Joined:Thu Jul 01, 2021 5:58 pm

Re: US citizen with UK limited company doing job for US client

Postby Millerp5 » Wed Jul 07, 2021 11:48 am

Hello David,

I'm not sure if I have elected to be disregarded. On my W9 form I have in the past selected
(Indvidual/sole proprietor or single member llc)

I'm not sure if this changes anything, but my ltd here in the UK is just a vehicle for me to freelance. My ltd here is not a subsidiary of some company back home.
(unless as a US person I'm somehow under that umbrella)

Kind regards,
Pascal

DavidTreitel
Posts:244
Joined:Thu Aug 16, 2012 4:31 pm

Re: US citizen with UK limited company doing job for US client

Postby DavidTreitel » Mon Jul 12, 2021 3:15 pm

As the entity has never elected to be disregarded, you'd be filing Form 5471 which includes calculating any SubPart F income and - just possibly - GILTI tax liability each year. This is not the ideal option. I'd suggest discussing this issue with the company's existing accountants.


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