I am a permanent resident of Japan offering translating and writing services through a godo kaisha (合同会社). I have recently signed a contract to translate a book for a publisher in the UK (based in London). In the contract, payment is defined as royalties, but I am entitled to an advance before any royalties are earned (half at start of work, half on delivery).
I’m trying to figure out if there are any taxation withholding issues on the UK side.
With US clients, I send a W-8BEN-E, and then bill them for the full amount on the contract. They send the full amount to my business bank account in Japan, and I declare it in Japan as business income and pay taxes on it. No problem.
I expected that things would work similarly for the UK, but this client is suggesting that it may not. They seem to want me to figure it out, and I’m looking for advice on where to start. I realize that answers on Reddit aren’t professional advice etc. and I’ll be responsible for making sure everything’s in order.
I read the recent “summary of tax treaty rules” on the Wiki, and the original treaty, but as far as I can tell these only apply to individuals and “transparent entities.” I don’t think my company in Japan counts, as I take a fixed salary from it and nothing more. What the company earns has nothing to do with my personal income, as far as the tax office is concerned. I’m not even allowed to take a higher (or lower) salary depending on company earnings if I wanted to – I have to decide my salary at the start of each financial year, and that’s it for that year. All of this is normal as I understand it, and it works for me.
So, what should I be looking into? Is there an equivalent to the W8-BEN-E for the UK that I should send to my client? Or do I have to deal directly with the UK’s tax authorities? I’d rather not just bill the client for the full amount and let them figure it out, as I expect they’ll do the simplest legal thing for them, which might make more hassle for me.
Some background info:
* I’m a permanent resident (and tax resident) of Japan, citizen of a commonwealth country. I’ve never even been to the UK and have no birthright citizenship there or anything like that. (I have no intention to ever live there, but I might want to visit at some point, so I’d rather not get marked in some database as a tax scofflaw.)
* I’m the owner and “representative employee” of my company in Japan.
* The contract is between the UK publisher and my company, not me personally.
Would appreciate any assistance or advice anyone can offer! I tried to figure this out via the UK tax authorities’ website but couldn’t find anything that seemed to cover my situation. So, if there is a page clearly describing what I should do, by all means call me a hapless doofus and send me there… Thanks in advance!
by Fun_Championship9217