JohnnyP

I'm looking at joining a company at their London offices in the next few months. While I haven't told them yet, I have dual citizenship both in the US and UK (currently, they know about the US citizenship).

What's the best way for me to consider which citizenship to use for the job? Which offers the best alternative from a tax perspective? (I will be making more than the maximum allowable salary for a full tax write-off.) I may eventually find my way back to the U.S. in the long-term, either with the same company or on my own.

Any thoughts?

Captain Schmidt

Your nationality is irrelevant to HM Customs & Revenue. And from what I hear, you can run but you can't hide from Uncle Sam when it comes to taxes.

Jenniferpa

Although I haven't looked into extensively, my children have dual nationality and the one thing I have picked up is that the USA can be extremely "funny" about claiming another countries citizenship when it comes to retaining the US citizenship, so whatever you do, check thoroughly before you do anything. As Captain Schmidt says, your nationality is completely irrelevant to HMCE, as if you're earning in the UK they'll happily take your money. My recollection (although now several years old) is that reciprocal tax agreements exist between the UK and the US. In other words you probably won't end up getting taxed twice, but you never know.

alanR

I'm surprised your company hasn't asked you to use your UK citizenship as it saves THEM a lot of time, money and general hassle with the British authorities as well as making it as if they are employing a "local".

Perhaps they can give you a little "bonus" for you agreeing to use your UK citizenship?

Do get your National Insurance Number sorted out as soon as possible when you arrive unless you fancy paying emergency rates of tax

alanR

They tend to be sniffy about US citizens taking another citizenship by naturalisation rather than by birth or descent

Aviatrix

Yes, one needs to get a National Insurance number when working in the UK - but it won't affect the rate of tax one pays.

Anyone starting their first job in the UK will pay emergency tax until their correct tax code has been worked out, and this usually takes a few weeks. The form you need to complete to get your tax code is a P46 which your employer is required to give you when you start work. This is not the same form as the National Insurance form.

Aviatrix

Just re-reading the original post and if I read this correctly you actually applying for a job with a UK company, as opposed to being sent there by an existing employer?

If you are applying for a job in the UK then you absolutely should apply as a British citizen because you may not get the job if you apply as a US citizen.

As a US citizen you will need a work permit which your employer will need to apply for, and they won't get it unless they can prove that they can't fill their vacancy with a citizen of an EU member state.

Jenniferpa

And affirmation (whatever that might mean)

Jennifer

JohnnyP

Thanks for all the advice, everyone. Currently, I have not told the company about my UK citizenship, because I want to maintain contrl of that decision until I know what all the ramifications and tradeoffs might be.

Do I need to get a National Insurance Number even if I am operating in the UK as a U.S. citizen?

Sorry that wasn't very clear. It is a U.S. company, but the job I am considering is out of their London office (as a direct hire). They have not raised any concerns about my citizenship as they have many Americans working out of their offices around the world.

The other thing I wonder, as well, is that if I want to transfer back to the HQ in the U.S., if that would be more difficult if I were a UK-citizenship employee vs a US-citizenship employee.

I'm trying to think of other consequences of making a decision either way... thanks for your thoughts!

aceman

I actually think your country of Domicile makes most of the difference here.

Now for someone with a domicile outside the UK working in the UK, any income earned outside the UK is exempt from UK tax, which may mean that you could get a bonus paid outside the UK and conceivably not pay tax on it. However, since the arguement would be that the money was earned within the Uk they would probably want their slice.

However I think the fact that you have a US passport sinks you, as they tax you on worldwide income from what I know.

I don't think its going to make much difference to you, mainly because of your US passport. It may well be worth getting a tax expert to look at this for you!

Aviatrix

Yes. If you are working in the UK then as far as the UK tax/social security system is concerned you are a UK resident and you are in the system and you come under the same rules as everybody else. The UK system does not distinguish between UK citizens and foreign citizens. If you live and work in the UK then your earnings are subject to UK tax and UK National Insurance contributions regardless of your nationality.

When it comes to your world-wide earnings then, as a previous poster has already mentioned, the UK system makes a distinction between "residence" and "domicile" (This distinction is worth pointing out as I know there are countries where this distinction does not exist).

Your country of residence is the country where you are living and working at the moment. Your country of domicile is the country where you have your permanent home. If your domicile is outside the UK then you only pay tax on income that arises in the UK but not on your income in your home country (or elsewhere in the world). Again, domicile is not tied to citizenship - you can be a British citizen who is domiciled abroad, you can be a non-British citizen who is domiciled in the UK.

jabrams72

This is no longer a problem, as long as you don't actively reject--the language reads "intent to give up US citizenship"--US citizenship (which includes serving in a foreign military who is at war with the US). So, it's not really an issue in the UK.

Link

Jenniferpa

Good link! They used to be fairly rigid (or at least the language was) about using a non-US passport, but it looks as if they've become more flexible.