I'm a US citizen and solitary owner of a Delaware based LLC I use to
offer my contract programming services through for 1099 based labor
throughout the US. Ie: I will work as a programmer for Intel, but
invoice them through my company, which I then turn around and pay
myself a salary. I'd like to move to London, can this same setup be
used? Must I create a company in the UK to contract myself through?
Can I bring my spouse, and can she gain employment elsewhere without
sponsorship for a work permit or visa? Can I sponsor her? How can I
avoid the process of having to gain sponsorship for a work permit in
London for contract based opportunities?

Hi,

Until recently, most contractors in the UK would work through their
own company and pay themselves and their wives or husbands a dividend.
Since dividends are taxed more favorably than a salary, the government
cracked down on this loophole and create a rule called IR35. I won't
go into the finer details of that rule, but basically if you are
contracted exclusively by a company, you are considered to be
"employed" by that company and you rates are taxed as if they were a
salary.

More details about this rule can be found here, including a definition
of when to apply or not the rule:

http://www.hmrc.gov.uk/ir35/legislation.htm

Of course, not many contractors are happy about this and they are a
few court cases that challenge the rule that are still pending.

Here is a link for a organization that defends the interests of
freelancers. You'll also find more information as to how the IR35 rule
might impact you.
http://www.pcg.org.uk

All this means that there are two options for you, 3 actually. You can
create your own company and have an accountant deal with the finer
details or continue to work through your Delaware company, but this
wouldn't shield you from your tax obligations or the IR35 and might be
a lot more hassle than it is worth it. Finally, you could work through
an umbrella company (an example of a company would be
www.parasolit.co.uk). This option has become fairly popular recently
because of the changes in legistlation. Basically, the company pays
the umbrella company and you get a salary with all taxes deducted. By
far the easiest option if you want to avoid the hassle of havin to
deal with the tax authorities.

As for the work visa, it's never an easy answer of course. It all
depends on the type of job you do and whether a company would sponsor
you or not. A good idea would be to visit the Home Office's site
first.
http://www.ind.homeoffice.gov.uk/content/ind/en/home.html

While getting a visa is never an easy task, it is certainly much
easier than in the US for instance, but your mileage may vary
depending on your own circumstances. Once you get your own visa,
getting one for your spouse wouldn't be a problem.

Hope this helps.

So do companies - such as this umbrella corporation - provide
sponsorship for you? And once you work as a freelancer - contractor -
are you freely able to move from company to company working without
any sponsorship at all from the company you are freelancing to?

I've checked out all over UK's site - and the options are both
numerous yet very confining to working in the UK like this - but if,
as you say, it's possible to create a corporation and both employ
myelf and my spouse - am I able to provide for both of us, through
this corporation, a work permit and both of us can seek employment
elsewhere with this permit?