Share this content
0
1390

Income Self employed

Income Self employed

Hello I have a client who lives and works in the UK but does some work in France (Events management) I said this needs to be declared, but not in France as her permanent place of work is in the UK not France. But she also threw another question which I do not have an answer for and here the question, she tells me she has dual nationality UK and USA and which she say that her income needs to be declared and may get taxed on the income.

Is this correct and if so what forms would I be looking for and does the income need to go above a amount to be shown & taxed.

Kind Regards

DKB Tiger

Replies

Please login or register to join the discussion.

avatar
27th Oct 2014 12:35

US Citizens

Unlike the UK the liability to tax in the USA is based on nationality even if the person concerened does not reside in the US.  You need to ensure that a form 1040 is submitted, or rather your client needs to, http://www.irs.gov/uac/Form-1040,-U.S.-Individual-Income-Tax-Return, but there is a generous exemption for earned income for persons who are non-resident - http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-In...

Your client may also find their identity is disclosed to the US authorities by a UK bank declaring to the UK HMRC under the FATCA rules.

Thanks (1)
27th Oct 2014 14:21

Another

Case in point.

Thanks (1)
avatar
27th Oct 2014 16:11

Thank you I have looked the the limit 2013 $97,500.00 her income for 2013 is £25,400.00 I will say that they is no did for her to declare her income until she gets passed the limit.

Thanks (0)
avatar
28th Oct 2014 23:37

You need to file to claim

You must file to claim the exemption and any income other than earned income are not covered by the exemption.

Thanks (0)
avatar
30th Oct 2014 08:48

As the client is a US citizen she is required to file a US income tax return each year reporting worldwide income and gains (including income not taxable in the UK, such as income within an ISA).

Filing of the return is mandatory even if there is no tax due. We do not know enough about your client’s circumstances to comment in detail, but if she is a mother she might qualify for a refund for child tax credits.

Your client may also need to file informational returns, such as an FBAR and Form 8938, each of which carry potential penalties for late filing even if there is no tax due.

As a self-employed worker your client will presumably also seek to obtain a certificate of coverage from HMRC to provide to the IRS.

If American tax return filing has been overlooked in the past, the current IRS streamlined procedures may assist in brining your client back into compliance.

From a practical perspective any UK based accountant or tax adviser offering US tax advice would want to ensure such work was included in an engagement letter and that the PI coverage extended to such services.

David Treitel | Managing Director | American Tax Returns Ltd

The Old Exchange, 12 Compton Road, London, SW19 7QD

Tel: 020 3542 6330

Email: [email protected]

Thanks (0)
avatar
30th Oct 2014 09:50

David,

She is single so no tax refund there, can this been done online like the tax returns for self employed in the UK

DKB Tiger

 

 

 

Thanks (0)
avatar
30th Oct 2014 10:12

US tax returns prepared by most US tax advisers in the UK are filed on paper. Some consumer software might be available directly to the client if she wants to prepare and file her own US income tax return that permits online filing (although possibly not at this time of year) but anyone using the streamlined filing procedures must file on paper with the correct specialist unit at the IRS. FBARs are required to be filed online as paper filing is not permitted for FBARs.

Thanks (0)
avatar
31st Oct 2014 08:20

I will forward this to my client and with your details I have nearly completed her UK tax return just waiting for her to get back to me regarding a few questions I have for her.

DKB Tiger

 

Thanks (0)
Share this content