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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: UK Tax
Satisfied Customers: 630
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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I will be relocating to the uk from the states. my salary is

Customer Question

i will be relocating to the uk from the states. my salary is part base, part comissions. base is 60k/year, commissions about 40k/year paid quarterly (about 10k/quarter). how would this be taxed?
Submitted: 1 year ago.
Category: UK Tax
Expert:  taxmanrog replied 1 year ago.
Thank you for choosing Just Answer! I will do my best to assist you with your question.
This is actually an area that I specialize in! I have been working on expat taxes for over 30 years!
Will you remain on a US payroll? If so, you need to get a Totalization Certificate, which will let you avoid paying the UK national insurance. Your wages will be subject to UK income tax however. If you stay on a US payroll, you will only be paying FICA tax from your wages. The UK company you will be seconded to (I am assuming that this is a foreign affiliate of your US employer?) will run a phantom payroll to withhold and remit your UK taxes.
Will your employer be paying the UK tax? Or will they withhold it from your wages? If your employer pays them, this is taxable income to you as well in the US. However, the foreign tax reimbursements will cost you a maximum of 39.6% in tax, but will give you $1 of foreign tax credit, so it is still a good deal.
If you move to a UK payroll, the UK company will automatically withhold UK income tax, and national insurance as well. The UK tax can be used as a foreign tax credit to offset any US income tax that is due from your foreign assignment.
I hope I answered your questions! IF you have more, please let me know and I will be more than happy to answer. If you have found my answer helpful, please rate me highly. I would appreciate it!
Again, thanks! Have a great week!
Roger