Where you are not a US citizen and have money from the US is Why you need to complete form W8. This money could be from your clients, pension income, royalties, dividends, capital gains – you get the picture.
Who must complete the W8 form?
Most importantly, it applies to anyone who is not a U S citizen who does not have a permanent establishment in the U S. For example, if you are an individual, sole trader, company or even a charity, not for profit then you must complete form W8.
Firstly, there are two main variations of the form W8. Form W-8-BEN for individuals and sole traders, and W-8BEN-E is for companies, partnerships, charities, and corporations.
This weeks’ I Hate Numbers podcast focus is on the W-8BEN form.
What is the purpose of the W-8BEN form?
Great question. The IRS form must be given to your US client or payer, otherwise they will deduct 30% withholding tax! Before payment is made to you, they must establish who you are, what your tax status is, and whether withholding tax applies to your situation.
I will talk you through what goes into the W-8BEN form. You cannot complete a tax form without getting a headache over jargon. My mind also wanders to George Bernard Shaw who said that The United States and Great Britain are two countries separated by a common language.,
I have you covered. I will translate the official speak, talk US-UK tax treaties and TINs. Fancy seeing what a completed form looks like, click the link to see a video visual.
You need to complete the form to stop 30% tax withheld at source. You don’t want this!!. Remember, you still must report this and account for it in the UK, but we’re talking about preventing withholding tax being applied.
In conclusion. If you do not complete the W-8BEN form you will have 30% tax stopped at source, which is not what you want. I hope you found this podcast useful. Help me share Number Love by telling your friends and family about the show. Listen now and Subscribe to I Hate Numbers, so I can send it straight to your inbox every week with all the latest updates from I Hate Numbers podcast! are