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, I am UK resident and I am wondering how should I pay

Resolved Question:

Hello, I am UK resident and I am wondering how should I pay taxes on income from research/teaching activity in the US. I have read the convention between UK and US, but it is not clear what Article 20A (Teachers) means. My question is whether I will pay taxes on this income or there is an exemption.
Many thanks.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

How long were you in the US for? Did you live there permanently or return to the UK frequently? What was the purpose of the research? Where did you do it? Were you paid for the research or the teaching or both? Have you suffered any US tax?
Customer: replied 2 years ago.

Hi,

I didn't start the contract yet but wanted to ask for some advice before I do so. The contract would be to work for 2 weeks in the US, mainly research activity. The purpose is to study American family businesses and find ways to improve their innovation ability. I will be paid in advance, in June 2015 (the visit will be in September). The US institution (a public university) asked me how do I want to be paid and I wonder if I should pay taxes at all, and if there are some taxes to be paid should I ask the US university to pay that directly or find another arrangement.

Hope I was clear, please let me know if you need more information.

Expert:  TonyTax replied 2 years ago.

Given that you are only going for two weeks, the income will be taxable in the UK as you won't lose your UK resident tax status. Point the university to Article 20 and in particular, paragraph 2 so that they can get you to sign the appropriate forms exempting you from US tax. From the information provided, you would appear to be able to fulfill the terms of paragraphs 1 and 3.

Even if you paid tax in the US, you would be able to offset it against your UK tax liability on the same income.

I hope this helps but let me know if you have nay further questions.

TonyTax, Tax Consultant
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