W-8BEN-E for UK Limited Companies

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  • Опубліковано 22 сер 2024

КОМЕНТАРІ • 88

  • @ClaraDekker
    @ClaraDekker 23 дні тому

    Thank you so much, Andy! I literally had a sleepless night last night after being asked to complete this form (I am a company secretary) and you took me through it in sensible, clear language.

    • @WorldTaxAndy
      @WorldTaxAndy  22 дні тому

      Thanks for the kind words, I had nightmares about this form myself when I first had to fill one in a few years ago, so very glad this was useful.

  • @henpage11
    @henpage11 10 днів тому

    Legend, thank you Andy

  • @ActiveAdam
    @ActiveAdam 5 місяців тому +1

    I rarely comment on anything, but I have to say that this is the best and most comprehensive explanation of the W8-BEN-E. I had to do it for Udemy a couple of years back and it was Hell. Now doing it for Podia affiliate link, and I just couldn't bare to have to work it all out all over again. This video was perfect. Thank you so much!!!

    • @WorldTaxAndy
      @WorldTaxAndy  5 місяців тому

      Thanks Adam for the kind words, hugely appreciated! I've been through the process myself, including with Udemy, so I know the struggle! Glad this has been able to help.

  • @jennajl
    @jennajl 16 днів тому

    Amazing - life saver Andy

  • @ianmorris2862
    @ianmorris2862 4 місяці тому

    Thanks so much for this - it's a really confusing form, and you're straightforward walkthrough has really helped.

  • @seandavies3719
    @seandavies3719 6 місяців тому

    Really appreciate the video Andy. Took what would have been a painful task and made it straight forward and easy to complete.

  • @pnero777
    @pnero777 11 місяців тому +1

    Really clear and useful. A perfect guide. Thank you for posting this - it really helped me.

    • @WorldTaxAndy
      @WorldTaxAndy  11 місяців тому

      Thanks for the great comment, hugely appreciated and glad to know it was useful!

  • @100pceffectiveltd
    @100pceffectiveltd 10 днів тому

    fantastic video. Thank you for sharing this

  • @paulchandler916
    @paulchandler916 Місяць тому

    Thank-you sir!

  • @samanthagan4775
    @samanthagan4775 3 місяці тому

    That was so helpful, thank you so much!

  • @ollo3788
    @ollo3788 5 місяців тому

    Very helpful video. Thanks!

  • @paulskelton7
    @paulskelton7 2 місяці тому

    Thanks for this. Form was looking pretty impenetrable so this was a very helpful resource.

  • @Zafarcakes
    @Zafarcakes 11 місяців тому +1

    Thank you so much for this! Very scary looking form xo

    • @WorldTaxAndy
      @WorldTaxAndy  11 місяців тому +1

      Thanks for the great comment Bilal, much appreciated. And yep the form is way more intimidating than it needs to be!

  • @GlenLong
    @GlenLong Місяць тому

    Thanks Andy. This was a lifesaver!

  • @matt.connelly
    @matt.connelly 3 місяці тому

    This is a fantastic explanation that solved my questions instantly. Thank you

  • @jerryangrave4965
    @jerryangrave4965 5 місяців тому

    Perfect, thanks Andy, your clarity and advice was much appreciated.

  • @adbros2866
    @adbros2866 Рік тому +1

    Thanks a lot, this was really useful 🙏

    • @WorldTaxAndy
      @WorldTaxAndy  Рік тому

      Thanks for your kind words, very happy to help!

  • @lesboogie5198
    @lesboogie5198 Місяць тому

    Aces, thanks mate :)

  • @seanmiller5495
    @seanmiller5495 8 місяців тому

    Incredibly helpful! Thank you Andy.

  • @HannahSpencer-mt2ok
    @HannahSpencer-mt2ok 4 місяці тому

    Thank you so much for this - so glad I found it!

  • @saniaio
    @saniaio 6 місяців тому

    this was so ridiculously helpful, thank you so much

  • @IdinSabahipour
    @IdinSabahipour 11 місяців тому +1

    Awesome video, Andy - thank you!

    • @WorldTaxAndy
      @WorldTaxAndy  11 місяців тому +1

      Thanks for the great comment Idin, glad it was useful. I really enjoyed your Day in the life of a corporate lawyer in London video, subscribed!

    • @IdinSabahipour
      @IdinSabahipour 11 місяців тому +1

      @@WorldTaxAndy Thank you, Andy!

  • @jackhunt2850
    @jackhunt2850 2 місяці тому

    Thank you Andy! Very easy to follow

  • @GuitarandMusicInstitute
    @GuitarandMusicInstitute 6 місяців тому

    Cheers Andy, much appreciated.

  • @dan444
    @dan444 4 місяці тому

    absolute legend - thanks so much for this

  • @user-qe1iv7hd2n
    @user-qe1iv7hd2n 6 місяців тому

    Super helpful, thanks Andy!

  • @revegacosmetics
    @revegacosmetics 6 місяців тому

    Thank you for this! Amazingly helpful!

  • @paulromano8528
    @paulromano8528 9 місяців тому

    Great video Andy thanks very much 👍

  • @techstream1731
    @techstream1731 5 місяців тому

    Thanks so much for this Andy!

  • @Mysticzen6
    @Mysticzen6 4 місяці тому

    Amazing job, it helped me immensely thank you so much

  • @oliverblokland1202
    @oliverblokland1202 3 місяці тому

    Cheers

  • @tonyjopia3003
    @tonyjopia3003 5 місяців тому

    Thank you Andy for the video, really appreciated

  • @nathandawson6009
    @nathandawson6009 Місяць тому

    In ecommerce, certain US states mandate the collection of sales taxes once specific thresholds are exceeded, based on customer location rather than the business's physical presence. As a UK business offering services to clients in the US, are there any similar requirements to be aware of regarding sales tax or other taxes? This video has been extroadinarily helpful by the way! Like many others, I was under the impression I'd have to arrange a TIN with the IRS.

    • @WorldTaxAndy
      @WorldTaxAndy  Місяць тому

      Hi Nathan, thanks for the kind words and glad it was useful. So yes, the US thresholds apply regardless of your company's jurisdiction. For example, if you make over $500,000 of sales into California, then you will usually have to charge Californian sales taxes on your products to clients there. This is similar to UK VAT in the sense that only the customer location is relevant, your business could be in any country but will still have to account for VAT if you cross the UK VAT sales threshold.

  • @Rppize
    @Rppize 4 місяці тому

    Thank you Andy, very helpful!

  • @liontamerlou
    @liontamerlou 7 місяців тому

    Thanks, great help!

  • @gokaykutlutwitch
    @gokaykutlutwitch Місяць тому

    Hey, thanks for this helpful video. In the LOB section I am not sure what to pick. We are two persons and both of us are 50% owners of the company. I picked the "Company with an item of income that meets active trade or business test" option since we both are non-UK residents, but the thing is our company didn't start selling a product yet. Is this a valid choice or should I resubmit the W-8BEN-E with another option? Maybe we can still pick the ownership test one, since the countries we reside in also have tax treaties with the US, so obviously we didn't set up the company in the UK to benefit from the treaty. Looking forward to hear from you, and thanks again.

    • @WorldTaxAndy
      @WorldTaxAndy  Місяць тому +1

      Hi, thanks for the kind words - yes, this option (Company with an item of income that meets active trade or business test) is still good for the purposes of the W-8BEN-E in your case - whether or not a product has been sold is not as important as the intent - if the company is set up with the purposes of generating its income from an active business then this box would still be suitable.
      As a general rule of thumb the W-8BEN-E forms are usually required to be collected by the US party every 3 years, so the form is completed on the basis of the company's most likely status over the next 3 years, and so if the product is expected to be sold in that period, then this still makes sense to choose.

    • @gokaykutlutwitch
      @gokaykutlutwitch Місяць тому

      @@WorldTaxAndy A product will be sold in a couple months at most, this is great then. Thank you so much for your quick response!

  • @midnightsky2933
    @midnightsky2933 10 днів тому +1

    Thank you for this video. What if you have a property business in the uk and you wish to buy property in the US? Is a property business a trading business? I know property is normally taxed in the county where it is located but suppose you rented out a place in the US, owned by your UK based limited property business, as an air bnb or had business income from farmland in US owned by a UK limited company?

    • @WorldTaxAndy
      @WorldTaxAndy  10 днів тому

      Hi, yes in the cases where the properties are being held for rental, airbnb, farmland etc then it would be a trading business. Even though the UK Ltd is a UK resident company, the ownership of US based assets means that the IRS would consider income derived from these assets to be US sourced income (you'd effectively have a US Permanent Establishment) and they'd expect a US tax return filed to declare the income from these assets. On the UK side, you would be eligible for double taxation relief - any US taxes paid would be credit against your UK corporate tax liability.

    • @midnightsky2933
      @midnightsky2933 8 днів тому

      Thank you for the reply. I thought that this might be the case. Which forms would the uk company file with the IRS? Would it be more tax efficient to hold US assets in a US Ltd company?

    • @WorldTaxAndy
      @WorldTaxAndy  8 днів тому +1

      ​@@midnightsky2933 The UK Ltd would file Form 1120-F - this is essentially an income tax return for a foreign company, similar to a UK corporate tax return but it only declares US based assets for the UK Ltd.
      In terms of actual tax owed, generally it's going to end up the same net result whether its held by the US or UK Ltd. But setting up a US company might be a little more burdensome overall because this would involve setting up a company, filing annual accounts / us corp tax returns etc, whereas with it in the UK Ltd company name you just have the one form to do essentially.

    • @midnightsky2933
      @midnightsky2933 7 днів тому

      @@WorldTaxAndy thank you so much. If only the tax office were as helpful. I've learned so much from watching your video and your replies... finally realized what I was doing wrong filling in the exemption form. I have a US social security number and I always put in that number as tax payer identification number while claiming tax residency ... no wonder people are confused ... they are probably wondering what idiot filled in those forms. Well, at least from now on I'll get this right 😊

  • @NikosAnimals
    @NikosAnimals 6 місяців тому

    thx mate

  • @user-el7lb8nm2l
    @user-el7lb8nm2l 6 місяців тому

    Thank you. Really helpful. What if you're filling this in as a UK ltd charity? And what if the income is an arts grant?

    • @WorldTaxAndy
      @WorldTaxAndy  6 місяців тому +1

      Hi, most of the form should be the same, however for Chapter 3 status, "tax-exempt organization" is generally the box I've seen used for charities if its a UK charity with no uk corporate tax. As grants are not specified in the treaty, at part III Claim of Tax Treaty Benefits, we can use "Article 22 (1)".... to claim a "0% rate of withholding tax" on
      "Other income"

  • @jeremycavanagh3660
    @jeremycavanagh3660 6 місяців тому

    Thanks, really helpful. One question, I’m a UK Ltd company and will be being paid later this year by a US company for work I will be doing for them for a few weeks in an EU country. I will never touch US soil. I guess I fill out part 14 a and b as you said but do I have to fill out 15?

    • @WorldTaxAndy
      @WorldTaxAndy  6 місяців тому +1

      Hi, thanks for the kind words. Yes you should still fill out section 15 just to ensure they understand the correct treatment (i.e 0% tax) and don't mistakenly withhold 30% tax from you as a default So I would use the Business Profits article reference unless it fits the profile of any of the other income types.

  • @prolific2213
    @prolific2213 Рік тому +1

    Hi, this video is brilliant :) As a UK limited company, I was just wondering if you know what article & paragraph would apply for tax relief on buying and selling US shares for a profit. Any help would be much appreciated. Many Thanks

    • @WorldTaxAndy
      @WorldTaxAndy  Рік тому +4

      Hi thanks a lot for the great feedback, much appreciated!
      So UK residents (both individuals and Ltd companies) do not pay any US capital gains taxes on the profits made from buying/selling shares in the US so long as they do not have a Permanent Establishment in the US or are 'engaging in a trade or business' in the US (in simple terms this just means physically being present in the US for a large part of the year, employing US staff, perhaps having a physical office space etc).
      So if you simply have a UK Ltd company that is not run from within the US but is buying & selling US shares you can refer to Article 13: Paragraph 5. This confirms that any capital gains tax will be taxable only in the State in which the beneficiary is tax resident (in this case the UK).

    • @prolific2213
      @prolific2213 Рік тому +3

      @@WorldTaxAndy Awesome Andy, that's really helpful. I imagine this answer will help a lot of folks out there as anyone opening a stock broker account for business use or a pension sipp is asked to fill out one of these forms.

  • @romanzimmerli3310
    @romanzimmerli3310 6 місяців тому

    Awesome video andy, thanks! Just wanted to ask, I sell on Amazon in the US with a UK LTD company, a lawyer told me because I have inventory storing there, I'm subject to ECI (effectively connected income) and therefore need to file taxes in the US. What is your take on that? (Products are produced and obviously stored at the Amazon warehouse.

    • @WorldTaxAndy
      @WorldTaxAndy  6 місяців тому +1

      Hi Roman, thanks for the kind words - so I'd agree that its ECI is there's your physical inventory stored in the US. Which generally requires a US tax filing. However, the income is subject to UK corporate taxes since its via a UK Ltd company - so given there's an effective dispute between who has taxing rights we need to refer to the UK US double tax treaty. Under article 7: business profits, the UK retains taxing rights unless you have a permanent establishment (PE) in the US - holding inventory is not sufficient to constitute a PE in my view, since you don't own the Amazon warehouse (note: you have dependent agents in the US or an office then you may have a PE, but I'm assuming its just the inventory that ties you to the US for now). So in this case the UK would be the jurisdiction in which all business profits are taxed

  • @madebypete
    @madebypete 10 місяців тому

    Amazing info thanks. I will be applying under Article 16 (Entertainers and Sportsmen) do you know what rate the withholding is for that category? I can't see it listed on the treaty in Article 16.

    • @WorldTaxAndy
      @WorldTaxAndy  10 місяців тому +1

      Hi thanks for the kind words - indeed you're in a unique spot as a musician. If you're going to receive more than $20,000 in the US then Article 16 applies. If its less than $20,000, then Article 7 Business profits applies (i.e no US tax).
      In the case of Article 16, because there's no limitation of the withholding tax amount, they will generally have to withhold tax at the default US rate which is 30%. You would have the option to file a US tax return as a non-resident at the end of the year to claim back some of this, because in many cases, the 30% is more than the tax they would have paid in the US had you declared their income on a US return normally.

    • @madebypete
      @madebypete 10 місяців тому

      @@WorldTaxAndy Thanks very much for the info

  • @SophiePavli
    @SophiePavli 2 дні тому

    Hi Andy, I am filling in a form for PR services provided to a US client. From what I can see on the various Articles, it would be Other Income but I cannot see the rate of withholding tax my customer would need to deduct, can you help? Thanks

    • @WorldTaxAndy
      @WorldTaxAndy  2 дні тому

      Hi Sophie, if the PR services are performed on behalf of your UK Ltd in order to generate revenue / profits for your company, then you can use Article 7(1) Business Profits at 0%. This is essentially a catch-all article for every trading business that sells products or services.

    • @SophiePavli
      @SophiePavli 2 дні тому

      Understood. Thanks for your help!

  • @jasonfashanu9652
    @jasonfashanu9652 3 місяці тому

    Thanks, I've been told that an EIN would need to be obtained from the IRS by completing a SS-4 form to obtain this. Does my business UTR code negate this?

    • @WorldTaxAndy
      @WorldTaxAndy  3 місяці тому +1

      Hi, yes this is a common misconception and thankfully we don't need to obtain EINs which can be a burdensome process - the UTR is sufficient here

    • @jasonfashanu9652
      @jasonfashanu9652 3 місяці тому +1

      @@WorldTaxAndy Thanks, appreciate it. I’m in the process of contracting for a US business via my Ltd and that form looked really confusing!

    • @jasonfashanu9652
      @jasonfashanu9652 3 місяці тому

      @@WorldTaxAndy sorry just a quick question, I sent this across to my accountant and they’re adamant that the TIN would be Company Number rather than UTR, they referred me through to this - www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim902330

    • @WorldTaxAndy
      @WorldTaxAndy  3 місяці тому +1

      ​@@jasonfashanu9652 Hi Jason, it's likely that the company number would also be acceptable. I've seen numerous IRS audits of W-8BEN-Es over the past decade and I've never seen them rejected on the basis of using the UK company number, or even in one case, a VAT number. However this isn't what I've seen most commonly used in practice - I'd estimate that 80-90% of forms are submitted using the UTR. This is because the IRS adheres to the OECD's definition and guidelines for TINs. The OECD only references NINOs or UTRs as equivalent UK tax identifying numbers. Personally I've always been more comfortable with this interpretation too given its a specific tax identifier rather than a general company identifier. But as above, its highly unlikely to be rejected even if you do go with company identifier - worst case scenario during an audit is that the IRS could simply ask the US client for the UTR if they really needed it (these audits are quite uncommon).
      www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/UK-TIN.pdf

    • @jasonfashanu9652
      @jasonfashanu9652 3 місяці тому

      @@WorldTaxAndy that’s perfect thank you, I came across that same link from the OECD and based the submission on that. Thanks again, this really helped with navigating the form !

  • @RecycleBinYT
    @RecycleBinYT 3 місяці тому

    I own a UK LTD Based company but I am not a resident of the UK.
    Will "Company that meets the ownership and base erosion test" still apply? if not, which other option should I choose?
    Thank you so much this is very helpful.

    • @WorldTaxAndy
      @WorldTaxAndy  3 місяці тому +1

      Hi, this option would only apply if UK residents have 50% or more of the voting rights in the UK Ltd company so we'd have to choose one of the others.
      The most common would be "Company with an item of income that meets the active trade or business test". This essentially just means that the company is actively trading outside of the US, and that its non-US activities are larger than its US activities.
      Alternatively, you can choose: "Other" and reference Article 23 paragraph 6. This basically confirms that you did not set up your UK Ltd company purely for tax benefits under the double tax treaty - you set it up for some sort of other commercial reason.

    • @RecycleBinYT
      @RecycleBinYT 3 місяці тому

      @@WorldTaxAndy Thank you so much for the detailed answer :) I could not find it anywhere else.

    • @KatarzynaN-zi6
      @KatarzynaN-zi6 2 місяці тому

      @@WorldTaxAndy if we tick "Company with an item of income that meets the active trade or business test", would still the article 7(1) be applicable or another one? What would be the 'justification' given in point 15 then? Thank you for your answer in advance, the video is brilliant! Greetings from Poland :)

    • @WorldTaxAndy
      @WorldTaxAndy  2 місяці тому +1

      @@KatarzynaN-zi6 thanks for the kind words! Yes in this case 7(1) would still be applicable, as long as the income you are receiving from the US is some form of business income / business profits. Section 14b doesn't impact section 15 at all - 15 will always be solely dependent on what type of income we are getting from the US.

    • @KatarzynaN-zi6
      @KatarzynaN-zi6 2 місяці тому

      @@WorldTaxAndy Awesome, thank you! Your channel is a life-saving place in the Internet! 🤩

  • @TheHive170
    @TheHive170 8 місяців тому

    If I'm a sole director and sole shareholder of a UK Limited company. Am I not treated as a disregarded entity (I.e. As a sole trader) by the US? and therefore need to apply for a 8832 to be officially classed as a company under their laws?

    • @WorldTaxAndy
      @WorldTaxAndy  8 місяців тому +1

      Hi, from the US perspective a UK limited company is viewed as a 'foreign corporation', regardless of its ownership structure. The US does view this as an entity separate & distinct from its owner thus does not deem you to be a sole trader even if solely owned.
      The reason for this is that the key threshold the US looks at is limited liability, not number of owners - if all owners of the foreign company have limited liability, then its a foreign corporation, and not disregarded. Interestingly, this means that even UK LLPs are usually considered to be foreign corporations in the eyes of the US because in most cases members all have limited liability.

    • @TheHive170
      @TheHive170 8 місяців тому

      @@WorldTaxAndy Hi Andy, thanks for the info it's very much appreciated, you're a life saver 🙌. I've been struggling with this for weeks because most of the top UK search results are accountants saying that I need to file an SS-4 and 8832 (which would also require me to get a new phone deal so I don't pay a small fortune calling the IRS). I looked into those 2 forms and they all seem to counteract each other. Based on your info I was able to look into the IRS guidelines for the forms and validate that the UK UTR is sufficient and the other two forms aren't required because a UK LLC is exempt from having to go through that process regardless of how the US classes their equivalent business type.
      If you're looking for a new video idea, I'd definitely recommend doing a video explaing all that and going through the IRS guidelines to prove it because I'm sure there are many people who have a single member UK LLC in the same position as me having the same problems. And unfortunately, resources on the topic are sparse and largely inaccurate.
      Thanks so much for your help ❤️

  • @19thplaylistable
    @19thplaylistable Рік тому

    It is also required to fill out forms SS-4 and 8832?

    • @WorldTaxAndy
      @WorldTaxAndy  Рік тому +1

      This depends. If you have a UK UTR then you don’t need form SS-4 (this is an EIN application form which is only needed if you dont have tax identifier already). 8832 generally no but this can be more complex & depends on your structure, business done with the US etc

    • @19thplaylistable
      @19thplaylistable Рік тому

      @@WorldTaxAndy Thanks for your fast reply. I have a UTR number. The business is registered as a Limited company and has one director only, and the business done with the US client offers engineering consultation and product development.

    • @WorldTaxAndy
      @WorldTaxAndy  Рік тому +2

      @@19thplaylistable okay great, in that case I see no reason why you’d need to fill in either of those forms. W-8BEN-E should be sufficient. Be skeptical of anyone advising you otherwise as they’re likely upselling unnecessary services. Unfortunately a common occurrence with LLCs

    • @19thplaylistable
      @19thplaylistable Рік тому

      @@WorldTaxAndy Thank you for your advice. I was skeptical of the other advice and help some others are offering online too. I didn't understand the real reason why the other 2 forms would be required. BTW: Great video it was great adive!

    • @WorldTaxAndy
      @WorldTaxAndy  Рік тому +2

      @@19thplaylistable thank you & hugely appreciate the comments. Hopefully I can provide some clarity & help you avoid being ripped off by some of these agencies.