Despite doing business with american companies for many years a client is asking me to provide a W8-BEN form and I am having trouble with Part II – the box to tick for question 9 and what to fill in for box 10.
An issue is that I am self-employed (a sole trader) rather than a limited company. And the payment is for the rental of computer software.
I found this article online: How do I complete a W-8BEN form?
It specifically mentions question 9.
Hope that helps,
Philip’s answer (above) is perfect, but it does beg the question of why you are trading in the US as a sole-trader. The only advice I would add is "Do the W8 now" to avoid any possibility of being subjected to withholding tax.
We work with many UK SMEs in the US and always recommend they form a company for three reasons:
1 It will help your marketing by demonstrating presence and commitment to the US as well as helping your search engine page rankings.
2 It will simplify and optimize your tax planning and make you (with the help of a US accountant) more money.
3 It will put your UK personal and corporate assets at arm’s length (but not totally beyond reach) of prospective litigants.
I would recommend you take a browse of www.exportaction.com. Setting up in the US is less expensive and time consuming than most UK SMEs initially perceive – and if you read the piece on "operating in the US as a branch of a UK company" – well don’t do it.
I hope this helps, but if you have any questions, or require additional information or clarification, please feel free to email me at [email protected]
Best of luck.