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I currently have a UK based consulting business but I have just moved to the US. I have retained some of my UK clients so I've been looking for the most tax efficient way to manage clients in the US and UK going forward.

It looks like it won't make sense to keep a business of this size open in both countries as it will be complicated and expensive. I have decided to incorporate in the US and close the company in the UK.

One question I haven't been able to find a good answer to is how I'm going to charge my UK clients in future. I obviously wouldn't want to just stick my new US bank details on the invoice and expect them to deal with transfer fees.

  • I've looked into leaving the UK bank account open and still receiving payments into it but it looks like I have to close this account as part of the Ltd closing company process. Is this correct?

  • Would I be able to open a new bank account in the UK linked to the US company? Would the UK then expect me to file some kind of return for this?

I realize that there would be a small group of people who have experience with this situation but any advice that anyone may have would be most appreciated!

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You can use an invoicing service such as Zoho Invoices. I use this services myself for domestic and foreign clients. It handles all conversion rates and you'll be able to charge your clients in their native currency.

This system will send an invoice but the transaction is handled by Stripe. From Stripe you can connect your back account and deposit your funds from there (similar to PayPal).

This allows you to keep a US bank account but still allow for transactions to occur overseas in a simple yet secure way.

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  1. When You close Your company, its bank account must be closed too.
  2. A US company can open an account in a UK Bank. Please note, that most times it requires an authorized representative to personally travel to the UK to sign the contract.
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We did exactly the same thing - left the UK, moved to USA, and wanted to close our UK company but keep UK clients.

For the bank account; if you have a business or personal account in the UK, you can create a new business account for your US company; just talk to your favorite bank. You'll need to go through a different department, so expect to talk to someone in London, but having an existing bank account makes it all nice and easy - we didn't need to go to the UK to do it. We no longer have any business or personal accounts in the UK apart from the one for our US LLC.

The new account will be in the US companies name, and your UK clients will send deposits to that account. We move most of the money each month (leaving just enough for bank charges), and we record it in our US accounting system in GBP (Quickbooks; it does the conversion to USD for us, and any anomalies are put somewhere like 'Exchange Rate' - our accountant does it, so I'm not 100% sure).

We do not fill out any UK tax forms; it's all US income, and all goes into the same LLC buckets.

To transfer money from the UK to our USA account, you could use your bank's facilities. Expensive and slow. We use a service called Global Webpay. They're based in the UK, and can send money anywhere in the world for a flat rate of 4.95GBP, and decent exchange rates. It takes two days for the money to arrive, which is fast enough for us.

  • Thanks. Unfortunately my bank said they wouldn't be able to open a new account over the phone so I will have to look around at others. My new US accountants have warned that having UK clients pay into a UK bank account could make me liable to still file returns there. Have you come across anything suggesting this? – user1194439 Jul 18 '16 at 14:09
  • Get a new accountant - or at least a second opinion. You don't have a UK company, or a legal presence in the UK, so there's nothing for them to tax you on. We pay tax on all our UK income, but in USD on our US tax returns. Any issues - we've never had any in 9 years of doing this - would be handled as per the 2001 USA-UK Double Taxation Convention treaty (i.e, you can't be asked to pay tax twice) – PeteCon Jul 18 '16 at 15:08
  • The rules on account openings seem to have changed. If you're not going to the UK in the near future, perhaps talk to your accountant about having a UK based relative become a company director for a short while, and they can open the account? – PeteCon Jul 18 '16 at 15:14
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The extra cost in arranging the foreign account and the related bookkeeping is probably higher than the transfer fees you're trying to save.

As a less complex alternative, speak to your US bank about opening a GBP bank account. Your clients could then transfer money into that, so at least they don't need to deal with exchange rates. The transfer fees are often negligible.

If transfer fees become a problem, suggest TransferWise to your clients. And, finally, they could arrange the transfer so that you pay your own fees and they only pay theirs.

As someone who has paid a lot of overseas companies I wonder whether you're overcomplicating it. Are you sure your clients would mind the switch? Why not try invoicing them in USD and getting them to pay by transfer? If you're worried you could add a £30 reduction to cover transfer costs.

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