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bateleur
Joined: 28 Mar 2006
Posts: 73
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Posted: Sun May 31, 2009 3:27 pm
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| colvil wrote: |
... I really do not wish to supply the USA with all this documentation to acquire the a ITIN which I have survived without thus far. Just a little bit more than confirming ones identity don't you think!?
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I agree. As far as I am aware, no other country in the world requires such a level of verification.
I am a bit disturbed to see how much information a US Government agency is collecting on people who have no connection with the USA at all.
Why do they need so much? What is all this information going to be used for? |
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jenny.horne
Joined: 18 May 2005
Posts: 7
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Posted: Sun May 31, 2009 3:52 pm
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Why can't we use EIN?
I have one of these for the appstore. Following Apple's guidelines on filling in the dreaded W8, they are all set up for musicians selling music - a little confusing for a developer.
But royalty payments to musicians and photographers must fall into the same category. Why are we being asked to provide an ITIN, when musicians selling through iTunes only need an EIN?
Someone asked this at the beginning of the thread and there was no response.
Please respond. I hate filling in forms at the best of times, the thought of paying someone £150 for the privilege of photocopying my passport is not a happy one.
Last edited by jenny.horne on Sun May 31, 2009 4:00 pm; edited 1 time in total |
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fraiseap
Joined: 10 Oct 2008
Posts: 1530
Location: Birmingham UK and www.adamfraise.com
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Posted: Sun May 31, 2009 3:53 pm
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I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
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overthehill
Joined: 22 Oct 2005
Posts: 43
Location: Manchester, UK
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Posted: Sun May 31, 2009 3:58 pm
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| fraiseap wrote: | I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
Your logic seems correct to me and it's a point I made a day or so back. However, there seems to be a view that the IRS do not collect on behalf of anyone else despite the treaty and therefore the Inland Revenue in the UK would treat what is left as your income. So for each £100 you would receive £70 from SS. As far as the Inland Revenue is concerned they may then want to take 40% of the £70, rather than another £10 from the £100. It's a question I've asked my accountant and had no response yet. Anyone else asking their accountant the same please post the answer here |
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george green
Joined: 02 Feb 2005
Posts: 1207
Location: Lancashire.
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Posted: Sun May 31, 2009 4:55 pm
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Am I wrong in thinking that income earned abroad is subject to taxation in the country in which it is earned?
If so, and assuming the tax on our SS earnings is deducted at source, why should U.K. revenue have any claim at all to the residue? |
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mreco
Joined: 12 Mar 2009
Posts: 1146
Location: Hampshire, UK
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Posted: Sun May 31, 2009 5:29 pm
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its all too confusing for my ikkle brain, i earn very little, so this really affect me? (im in UK)
Also i havent recieved an email |
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Mike Price
Joined: 06 Jun 2008
Posts: 2919
Location: South Wales
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Posted: Sun May 31, 2009 7:11 pm
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| fraiseap wrote: | I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
Hi Adam
I think the treaty only works to allow you not to pay tax in two countries. It does not work in the way you have suggested in that if you pay 30% that you do not need to in the US the UK will not take that into account. You wonder why the tax authorities in treaty countries do not share information. We should be able to give our UK tax account reference to the US IRS and that should be sufficient, but thats too simple.
Mike
Mike |
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dreamtimestudio
Joined: 19 May 2008
Posts: 171
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Posted: Sun May 31, 2009 11:42 pm
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I cannot imagine anyone except for the most die hard microstock devotee going through all that BS for such a small amount of money.
They can keep my 30% and once I reach next payout (probably in 2020) then I'll be removing my images, microstock was an ebarrasing sell out to begin with now its just a bad joke. |
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winther
Joined: 16 May 2007
Posts: 92
Location: London
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Posted: Mon Jun 01, 2009 12:55 am
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I'm Danish (Danish passport), but live in the UK permanently. What procedure do I follow? Both UK and Denmark have a tax treaty with US |
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gala98
Joined: 01 Jul 2006
Posts: 52
Location: UK
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Posted: Mon Jun 01, 2009 4:14 am
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| overthehill wrote: | | fraiseap wrote: | I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
Your logic seems correct to me and it's a point I made a day or so back. However, there seems to be a view that the IRS do not collect on behalf of anyone else despite the treaty and therefore the Inland Revenue in the UK would treat what is left as your income. So for each £100 you would receive £70 from SS. As far as the Inland Revenue is concerned they may then want to take 40% of the £70, rather than another £10 from the £100. It's a question I've asked my accountant and had no response yet. Anyone else asking their accountant the same please post the answer here |
As long as SS provides us with proof that they have withheld 30% tax from our earnings, you would need to declare the gross amount on your tax return with the 30% witheld amount elsewhere on the tax return form. Most UK'ers pay tax at 20% or 40% so those on 20% would only get tax relief upto 20% whilst those UK'ers paying tax in the 40% bracket will be able to claim relief on the full 30% withheld amount.
So until my income from stock makes it worthwhile, I'm going to take the hit.
If US sales turn out to be about 25% (as bandied about in various threads) then for each $100, I will only be US taxed 30% x $25 = $7.50. So I will then declare the full $100 as income and declare $7.50 as tax already paid, leaving the UK taxes to be calculated on either $95 or $92.50 (haven't quite got my head around the relief bit but I'm not going to argue over $2.50!!)
For me, at the moment at least, it's just not worthwhile to get an ITIN. Have a look at your sales and work out what 30% of 25% would be each year - if the tax is higher than the cost of getting an ITIN then I would get an ITIN - it's all very well to talk about pulling portfolios etc but with SS as my joint #1 earner, I would effectively be halving my income over a few piddley dollars tax (as much as I hate that idea) - and I'm just a low man on the totem pole. |
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fraiseap
Joined: 10 Oct 2008
Posts: 1530
Location: Birmingham UK and www.adamfraise.com
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Posted: Mon Jun 01, 2009 9:38 am
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| Mike Price wrote: | | fraiseap wrote: | I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
Hi Adam
I think the treaty only works to allow you not to pay tax in two countries. It does not work in the way you have suggested in that if you pay 30% that you do not need to in the US the UK will not take that into account. You wonder why the tax authorities in treaty countries do not share information. We should be able to give our UK tax account reference to the US IRS and that should be sufficient, but thats too simple.
Mike
Mike |
Hi Mike, I have just come off the phone to my accountant who has confirmed that the tax treaty allows a tax credit to be applied when I fill in my tax return. The 30% deducted will be credited to me and, paying 40% tax I would pay another 10%. paying 20% tax I lose 10% of my US earnings - that is small beer for me so I won't be doing anything - just taking the 30% deduction. |
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overthehill
Joined: 22 Oct 2005
Posts: 43
Location: Manchester, UK
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Posted: Mon Jun 01, 2009 4:13 pm
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| fraiseap wrote: | | Mike Price wrote: | | fraiseap wrote: | I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
Hi Adam
I think the treaty only works to allow you not to pay tax in two countries. It does not work in the way you have suggested in that if you pay 30% that you do not need to in the US the UK will not take that into account. You wonder why the tax authorities in treaty countries do not share information. We should be able to give our UK tax account reference to the US IRS and that should be sufficient, but thats too simple.
Mike
Mike |
Hi Mike, I have just come off the phone to my accountant who has confirmed that the tax treaty allows a tax credit to be applied when I fill in my tax return. The 30% deducted will be credited to me and, paying 40% tax I would pay another 10%. paying 20% tax I lose 10% of my US earnings - that is small beer for me so I won't be doing anything - just taking the 30% deduction. |
Brilliant. That's what I thought. I suspect all we need is a "statement" from SS along the lines of Sales = $100, Tax withheld = $30, Payout = $70. BTW my bloody accountant hasn't replied to my email yet asking exactly the same question you asked! |
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themightyshrub
Joined: 21 Jan 2009
Posts: 943
Location: www.heathergreig.co.uk
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Posted: Tue Jun 02, 2009 1:44 am
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I'm a student, so I don't earn enough money to pay tax at the moment - does that mean I can claim this 30% back from the UK without having to give details to the USA? I'm already having to claim back some tax I paid last summer that I shouldn't have, so I would guess the procedure is similar? Or can I only claim back this tax against tax I should already be paying?
I hope that makes sense. I don't have an accountant to check it with, so if anybody knows, answers would be greatly appreciated. |
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gala98
Joined: 01 Jul 2006
Posts: 52
Location: UK
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Posted: Tue Jun 02, 2009 6:19 am
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| themightyshrub wrote: | I'm a student, so I don't earn enough money to pay tax at the moment - does that mean I can claim this 30% back from the UK without having to give details to the USA? I'm already having to claim back some tax I paid last summer that I shouldn't have, so I would guess the procedure is similar? Or can I only claim back this tax against tax I should already be paying?
I hope that makes sense. I don't have an accountant to check it with, so if anybody knows, answers would be greatly appreciated. |
I don't think you will be able to claim it back in the same way as you are currently doing but I'm no expert. Are you filing a tax return anyway for your stock income? if so, you will be able to put the gross SS income in your form and the withheld tax will form part of your 'expenses' leaving you with a loss (presumably) for the year but if you haven't paid any tax, that loss will carry forward to the next year. I think losses can carry forward 3-5 years (not certain but gives you a clue where to start looking!!) so unless you are likely to be a student for that long, you will be able to offset your losses now against future profits or future years when you hve paid tax on other income (PAYE) and reclaim on your photography losses.
Hope that makes a little sense at least - hopefully someone with more kowledge will correct any errors in my statement. :) |
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Mike Price
Joined: 06 Jun 2008
Posts: 2919
Location: South Wales
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Posted: Tue Jun 02, 2009 7:08 am
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| fraiseap wrote: | | Mike Price wrote: | | fraiseap wrote: | I am not sure we need to bother with any of this.
Here's my reasoning
1. The US IRS deducts 30% on behalf of tax organisation in other countries.
2.If you live in a treaty country (eg UK) the 30% counts towards your tax burden
3.The 30% only applies to US income so the actual deduction is less than 30% (maybe 25%)
4. All UK taxpayers earning a reasonable sum pay 25%, Often we pay 40%.
5. So, if we have documentary evidence of the 30% deduction by SS then there will be no more tax to pay unless the deduction is less than 25% of the total income from SS.
6. If we pay 40% tax then we pay the difference between the deduction and our tax liability.
If anyone can let me know if I have got this wrong please say so. |
Hi Adam
I think the treaty only works to allow you not to pay tax in two countries. It does not work in the way you have suggested in that if you pay 30% that you do not need to in the US the UK will not take that into account. You wonder why the tax authorities in treaty countries do not share information. We should be able to give our UK tax account reference to the US IRS and that should be sufficient, but thats too simple.
Mike
Mike |
Hi Mike, I have just come off the phone to my accountant who has confirmed that the tax treaty allows a tax credit to be applied when I fill in my tax return. The 30% deducted will be credited to me and, paying 40% tax I would pay another 10%. paying 20% tax I lose 10% of my US earnings - that is small beer for me so I won't be doing anything - just taking the 30% deduction. |
hi Adam,
I am in the same position so if I can get the 30% offset against my tax. I will probably take the hit.
Mike |
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