A PAYE system is used by most UK employers to withhold taxes from employees’ paychecks.

You will need to file a UK tax return if ‘any’ of the following applies to you;

• – Your income is exceeding £100,000 including any benefits
• – Your investment income exceeds £10,000 per year
• – Your self-employment income is £1000
• – You are the director of a company (unless you receive no salary and/or benefits)
• – You and your partner have income exceeding £50,000 whilst claiming Child Credit
• – You have income from a source external to the UK

A form should be sent to you if you are required to file by Her Majesty’s Revenue and Customs (HMRC). HMRC offers a tool that can be used for checking your tax filing obligations. In addition, you may be able to receive deductions from HMRC by filing a tax return.  Viable deductions  include donations to charities, private pension contributions and work related expenses over £2,500.

HMRC requires you to register online if you have not received a tax form from them. Avoid late filing penalties by doing this as early as possible.

The types of income you should report will depend on your residency status. The only income you need to report if you are a non-resident is UK-sourced. UK residents whose permanent home, or “domicile,” is outside the UK and who are not considered “ordinary residents” are subject to special rules.

Residency status is determined by how long you intend to stay in the UK and how many days you spend there physically. Generally, if you live in the UK for at least two years, spend more than 183 days here or average more than 91 days there over the past four years, you are considered a resident for tax purposes.

It is common for US expats in the UK to be considered non-UK domiciled. UK residence and domicile regulations are constantly being updated by HMRC. If you want to be clear about your domicile status while living in the UK, we strongly encourage you to speak with a UK & US tax experts sooner rather than later.

Xerxes Associates LLP work closely with US and UK expats from all different backgrounds, circumstances and occupations as well as high-net worth individuals in order to help them through the complexities of US and UK tax compliance requirements (tax imposed on expatriates). If you have a query or would like a friendly no obligation chat about your requirements then please get in touch and we shall be happy to assist you.

Xerxes Associates LLP have been preparing US taxes for Americans living in the UK for over 20 years. We are experts in all aspects of US tax procedures and we offer a professional, responsive and personalised service to all US and UK expats.

Every US citizen including Green Card holders (equivalent to a permanent stay visa) is required to file a US tax return every year. In addition to preparing individual US federal and state tax returns, Xerxes Associates LLP can also consider the tax efficiency of your funds, assets, savings and investments.

The ability for Xerxes Associates LLP to handle both UK and US taxes is important to our clients who have lived in the UK from a few days to a number of years. We are able to advise individuals on all matters related to taxable income from the US, UK and other parts of the world. Click here to view the full list of our packages and prices.

Tax filing requirements in the US do not stop just because you no longer earn income in the country. Citizens of the US are taxable on their worldwide income if they hold US citizenship. A US tax return must still be filed if you have an employment contract in the UK, but do not earn US income.

No matter how complex your US tax return is, Xerxes Associates LLP can assist you. We can even help if you have not filed for many years and want to get back on track. By taking advantage of the The Streamlined Tax Amnesty program, we can help chisel a route which is the best way for US citizenship holders in the UK to catch up on their US taxes.

Once you earn more than $12,400 USD as a single filer, you have to file a tax return. There is a threshold of $24,800 for married joint filers, and an additional threshold of $18,650 USD for heads of household. When your income exceeds the filing threshold, you’ll need to file a US 1040 Federal Tax return for that year, regardless of the currency.

Married couples filing separately need only earn more than $5 USD to file a US tax return. You must file a US tax return if you are married to a non-American and your worldwide income exceeds $5 USD. You still need to file taxes even if you do not work or earn an income.

You must file a US tax return if you are self-employed, or if your self-employment income exceeds $400 USD per year (in any currency from any country).

Xerxes Associates LLP work closely with US and UK expats from all different backgrounds, circumstances and occupations as well as high-net worth individuals in order to help them through the complexities of US and UK tax compliance requirements (tax imposed on expatriates). If you have a query or would like a friendly no obligation chat about your requirements then please get in touch and we shall be happy to assist you.

Are you looking for US tax accountants and advisors in London or the UK?  View our fees and packages for UK and US tax return services.