US Tax Form W8
Discussion
It's a long shot, I know, but I could really do with some help re. US tax...
I've written a few books which were originally released by a publisher with UK offices, meaning I could get paid properly over here. Since they went into liquidation, a couple of US publishers have bought the rights up. As the royalty payments are now coming over from the US, they're getting taxed there first, and will keep doing until I can get form W8 completed & approved. Every time I send it off, they seem to not grasp the concept that I'm not a US citizen, so can't provide US Social Security number, passport, etc. And I'm *not* sending my UK passport over to the states!
Has anybody got any knowledge of the US tax system (it's a complete unknown to me), and how I might get this resolved.
Thanks in advance...
I've written a few books which were originally released by a publisher with UK offices, meaning I could get paid properly over here. Since they went into liquidation, a couple of US publishers have bought the rights up. As the royalty payments are now coming over from the US, they're getting taxed there first, and will keep doing until I can get form W8 completed & approved. Every time I send it off, they seem to not grasp the concept that I'm not a US citizen, so can't provide US Social Security number, passport, etc. And I'm *not* sending my UK passport over to the states!
Has anybody got any knowledge of the US tax system (it's a complete unknown to me), and how I might get this resolved.
Thanks in advance...
You are liable to UK tax on your worldwide income. However, the US royalty payers may be obliged under US tax law to deduct US tax at source (I am no expert on US taxes, I hasten to add) but there is a double taxation agreement between the US and the UK which should prevent the Inland Revenue here in the UK from taking any more tax from this royalty income.
eric mc said:
You are liable to UK tax on your worldwide income. However, the US royalty payers may be obliged under US tax law to deduct US tax at source (I am no expert on US taxes, I hasten to add) but there is a double taxation agreement between the US and the UK which should prevent the Inland Revenue here in the UK from taking any more tax from this royalty income.
Yep; if it were legal, I'd leave it as it is - I'm only getting hit for 30% by the US IRS rather than 40% over here. But it's not.
I need US tax exemption, which is what the W8 form is for. But it seems to be geared towards US citizens!
tvrforever said:
My advice would be to get professional advice
Cheers! I'm reluctant to throw any more money at this, as I'm already tens of thousands out of pocket on my publisher going bust. Think it may come to that when I start trying to figure out how to declare a tax loss, anyway!j_s_g, I am not a professional in these matters, so I do recommend professional advice...
However, it looks as if you, as an individual recipiant may not be able to "get out of" the 30% withholding requirement...
Pertinant info here:
www.irs.gov/businesses/small/international/article/0,,id=104997,00.html
One method to get out of withholding (that is used quite a bit in the States) is incorporating. This may or may not work for a foreign corporation. Basically you would form a corporation and transfer your right to receive royalties to that corporation. That way the US company that is paying you the money could report a general expense (cost of doing business) versus a compensation related expense (subject to withholding)...
...like I said - professional advice is the way to go...
ErnestM
However, it looks as if you, as an individual recipiant may not be able to "get out of" the 30% withholding requirement...
Pertinant info here:
www.irs.gov/businesses/small/international/article/0,,id=104997,00.html
One method to get out of withholding (that is used quite a bit in the States) is incorporating. This may or may not work for a foreign corporation. Basically you would form a corporation and transfer your right to receive royalties to that corporation. That way the US company that is paying you the money could report a general expense (cost of doing business) versus a compensation related expense (subject to withholding)...
...like I said - professional advice is the way to go...
ErnestM
Another one you can use - if you're local to London - is to go to the US Embassy and ask them for advice.
You'll need to phone up before hand as their tax bit only works on certain days / times etc but they are very helpful and you'll be amazed what forms they do have and how helpful they are.
They have a form that you can use which creates you a global ID which you uses instead of a US SSID on all the other forms - takes about 10 days to arrive.
I know professionals are expensive (trust me I saw my bill) but you want this squared as at a minimum it will involve changes to 2 years UK tax submissions and 1 years US tax...
You'll need to phone up before hand as their tax bit only works on certain days / times etc but they are very helpful and you'll be amazed what forms they do have and how helpful they are.
They have a form that you can use which creates you a global ID which you uses instead of a US SSID on all the other forms - takes about 10 days to arrive.
I know professionals are expensive (trust me I saw my bill) but you want this squared as at a minimum it will involve changes to 2 years UK tax submissions and 1 years US tax...
apeebles said:
The W8 form is pretty straight forward to fill in (One page.) Anyone who invests in the US stock market or has had US stock options are usually very familiar with this form and it does work.
I keep filling it in, and they keep sending it back! It's getting silly now - this's been going on for a good 8 months or so! Guess I'll just try again.
A tax ID number will get it done.
I would not recommend setting up a Corp or S Corp you will have a lot of reporting to do, from the the Fed and the State (in which you incorporate) Some reports have time limits, return within ten days!
Cost of setting up a corp, about $600, monthly maint about $120, reg office prob $100/annum.
I would not recommend setting up a Corp or S Corp you will have a lot of reporting to do, from the the Fed and the State (in which you incorporate) Some reports have time limits, return within ten days!
Cost of setting up a corp, about $600, monthly maint about $120, reg office prob $100/annum.
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