British Expatriate Network

I'm hoping someone else is, or has been in the same situation as the following and can give some advice...

I currently work for a UK company who seem very likley to continue to employ me once I've emigrated to the USA (on 21 September 2004).

My worries are with regards to taxation.

I am told that because I will be physically "working" in the USA, I will be liable for US income tax.

So what would be the best way to proceed?
- should I become self employed in the USA and bill the UK company?
- Can I be paid as normal in the UK, paying UK taxes and not have to pay US tax?
- have I missed a better alternative?

Also, I am lead to believe that when emigrating from the UK, you need to advise the Inland Revenue of this, otherwise if you were to return to the UK (to work), you could be liable for missed taxes? Is this true?

Generally, you pay taxes to the country that you are physically present in. Therefore, if you are paying in the US, you aren't paying in the UK. You don't really have a choice as to which country to pay your taxes to.

You will need to get some advice/representation on how to go about notifying authorities, paying taxes and preparing returns from a CPA or tax specialist with experience in US/UK taxes, given that it seems your employer will not have a payroll dept in the US. It's not completely straightforward, and certainly outside the scope of the BB.

I enquired recently for myself, and the Inland Revenue said you need to notify them of your departure date, then your UK salary is paid to you gross and you make your own arrangements for paying the US tax.

If it works out for me, I'll put something like 20% of my salary into a high-interest account and use it to pay the tax quarterly/yearly, whatever my accountant recommends )