As a British national looking to be commissioned by a USA company, what legislation/tax do I need to know?

What tax/business/other legislation should I be aware of as a British National who could soon be commissioned by a USA based company for one off projects, i.e. I do the work, in this case artistic, and leave them with the results should they accept? Any future work would be a fresh commission.|||You don't need to know a lot, as long as:





1. You surrender all right of title to the work to the US customer.


2. You perform the work outside of the US.


3. You have no ownership interest in the US company that is paying you.





Meet those 3 requirements -- meaning that the work is not "effectively connected to the US" (US tax jargon) -- and you will have no tax liability to the US. I'll assume that #2 and #3 are a given, but #1 is where it could get messy.





If you retain Intellectual Property rights to the work (artistic, software, etc.) and merely grant them a license to use the work (with or without restriction), that effectively connects the work to the US and any payment would be considered taxable royalties paid to you. You would have to supply a Form W-8BEN to the company and would receive a Form 1042-S at the end of the year. They would withhold 30% of your payment and turn it over to the IRS. You could then either let that ride or file a Form 1040-NR return to settle up with the IRS. Letting it ride would make sense if the net tax rate would exceed 30% -- around $940,000 would do that -- but filing the 1040-NR return would make sense if it were less.





If you don't retain any IP rights -- be sure that your contract is very clear on that matter -- then the work is not effectively connected to the US and is not taxable. If they ask for a Form W-8BEN, refuse claiming that since you are not a US person (citizen or resident) and that the work is not effectively connected to the US you are therefore not subject to US taxation. Your certification of those facts and your foreign address are sufficient for the company's records keeping should they be audited on the matter.|||US sourced income will need to be reported, this assuming is self employment


and, of course, where you are actually residing