U.S. contracting advice please

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  • U.S. contracting advice please
  • Premier Icon BlobOnAStick
    Subscriber

    Hi folks,

    I have an opportunity to go contracting in the U.S. On a two-week-on, two-week-off basis. Main residence is in the U.K

    It’ll be my first job contracting so aside from the ‘leap of faith’ it requires in coming out of a salaried job, there’s also the complication of trading across borders and the ctax issues (I believe I’d be liable for tax in both countries if I don’t set myself up correctly). Of course on top of that I won’t be on Greeta’s Christmas card list.

    Obviously I’ll be consulting financial advisors, but I’m interested in people’s experience: Anyone got any advice?

    Thanks in advance!

    TheBrick
    Member

    A few years ago now but I did lots of work in The states and the company I was working for had some issues with tax. Some threshold that would mean we would have all had to fill out tax form for the US! The big one is that I think we would have need to fill out the tax return for 5 years afterwards too!

    Anyway you can’t be double taxed but you can be taxed what’s owing above what you have paid. Also if it’s in the US make sure the money is big.

    Premier Icon tomhoward
    Subscriber

    It’d have to be mega silly money for me to do two weeks on, two weeks off in the states. The jet lag would kill me as it take me ages to adjust after a holiday. Is the travel part of the on or off weeks?

    Or are you planing on staying there some of your off time?

    Premier Icon BlobOnAStick
    Subscriber

    Thanks Mr Brick.

    if it’s in the US make sure the money is big

    Is that to cover all the tax and exchange rate risk or just because?

    Premier Icon BlobOnAStick
    Subscriber

    It’s effectively two weeks/one weekend out there, two weeks/three weekends at home. I’ve been doing it since May and have a bit of a routine going, but yeah I don’t think I can do it for more than about 12 months more.

    Premier Icon dc2.0
    Subscriber

    Hi OP
    Do some research on what visa requirements you might need. If you’re currently employed then you’re skirting a fine line already if just using ESTA, but if contracting you may need something more robust. (I hope I’m wrong for your sake but if you’re travelling there that often then sooner or later they’ll flag you up and investigate (have seen this happen))

    Premier Icon BlobOnAStick
    Subscriber

    You’re right D.C., although I haven’t strictly been working for them on an ESTA. It’s been all about exploring a partnership between the company I currently work for and the US one. The conclusion is highly likely to be no partnership but the US company now want me to work for them and the opportunity is too good to miss.

    Visa is number one on the list once I’ve decided to go for it.

    longmover
    Member

    As someone who works FIFO, do not underestimate how much the travel and the work can take it out of you for your time off, it takes me a couple of days to switch off again when I get home. Will you be paid in USD? It can make finding finance a bit more complicated, I’m finding this renewing my mortgage (part of that is to do with the country I’m paid from).

    Premier Icon BoardinBob
    Subscriber

    Make sure you have suitable private health insurance in place. Be prepared to wince at the cost

    TheBrick
    Member

    The make sure the money is big comment was because.

    1. The hassel.
    2. The risk with exchange rate.
    3. Heath care insurance when over there.
    4. In a fair amount of skilled jobs the US pay is > UK pay, make sure they are not exploiting your ignorence of local market.

    Premier Icon tonyg2003
    Subscriber

    I worked in the US a lot but never over 90days and as such I could be paid in US (for some of my salary) and only pay UK taxes which made the whole thing vastly simpler. Look like you can’t do this.

    I would say that you need a good US based accountant since there are so many deductions you can add into your tax return a good accountant is essential. Also you need to do things like decide on how much withholding tax you need to go for. The IRS is very complicated compared to HMRC, which is why vastly more (normal) Americans have accountants than over here.

    TheBrick
    Member

    True. It may have changed but you could deduct mortgage interest in Texas.

    Premier Icon bigjim
    Subscriber

    I contract in Denmark which obviously isn’t the same but on my experience I would get accountants sorted for both countries and make sure everything to do with residency/visa/work insurance/tax/healthcare is all crystal clear and sorted up front before you start, your UK accountant is likely going to say they’ll have absolutely nothing to do with advising on US tax. Also see what is actually left of that juicy day rate by the time you’ve paid all the middle men and bills and taxes, it’s amazing how much evaporates before hitting your bank account.

    A friend of mine started working in the US and due to bad advice/admin error on visas was arrested on returning from UK, officially branded an illegal alien, deported and banned from entering the US for five years or something. He laughs about it now though.

    Your carbon footprint is going to be a shocker, makes me feel better about mine!

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