US tax responsibilities

If you remain a citizen or permanent resident of the United States while living in the UK, then you must file an annual US tax return with the US federal government based on your worldwide income. If you have assets outside the US, you may be required to file additional informational returns.

Several special provisions and exclusions provided by the US government are available to prevent double taxation, which, when used properly, may minimise or eliminate the amount of tax due. Click here to learn more about US tax responsibilities 

UK tax responsibilities

PAYE as an employee – As an employee, you are subject to Pay As You Earn (PAYE) tax, which will also apply if you are being paid from outside the UK.

As part of the monthly online payroll reporting, if you are a moving employee to the UK, your employer will provide Her Majesty’s Revenue and Customs (HMRC) with a “Starter Declaration.” This will provide certain personal information details such as your start date of employment, home address, hour of work and more.

As soon as HMRC receives a Starter Declaration, it will issue you a tax code. Your employer will also receive a copy of the code, which will be used to determine the amount of tax to be withheld.

Self-assessment tax return – You will be required to complete a self-assessment tax return if you meet any of the following criteria during the tax year. If you would like us to prepare your UK tax return on your behalf and provide advice regarding tax planning to minimize your UK tax obligations, please contact us.

• – Claiming non-resident or non-domicile status?
• – Are you self-employed, a company director or a partner in a business?
• – Have you received income over £100,000?
• – Did you receive £10,000 or more from taxed savings and investments?
• – Have you received more than £2,500 in untaxed income?
• – Are you or have you received income from letting out a property?
• – Have you received foreign income liable to UK tax?

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.

US residents living in the UK are in safe hands with Xerxes Associates LLP with matters related to expat taxes (tax imposed on expatriates). Our team of dual qualified US and UK tax professionals specialise in preparing individual tax returns for US and UK residents and provide bespoke personal tax advice tailored to your unique circumstances.

Depending on what state you are from and your ongoing association with that state, you may be required to file a state tax return even while living abroad. We assist US expats in understanding and complying with the ever-increasing tax regulations and in minimising their tax liabilities whenever possible. Our London office has helped many overseas workers through pivotal phases of their tax liabilities.

You can talk to us about how best to manage your UK and/or US income and pay the correct worldwide tax. The tax rules for foreign domiciled residents come with ever-increasing complexity so we have created a list of services to provide you with a complete solution for all your requirements.

• – UK tax advice
• – US tax advice
• – Submitting tax returns for non-UK residents with a UK source income
• – Residence and domicile advice
• – Advice on UK statutory residency rules
• – Inheritance tax advice
• – UK resident and offshore trusts

Our streamlined filing procedure can be used to bring you up to date with your US or UK returns if you are an ‘accidental American’ or simply behind with your US or UK returns. We can also help you make the most of the incentives available to you, whether you are yet to come to the UK, already here, or have already left.

To speak to one of our expatriate tax experts, please fill in the form below and a member of our team will be in touch to discuss your requirements and how we can help.

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.

Whether you are a US Expat already living in the UK, a US citizen looking to invest in the UK, or are a US citizen considering a new job opportunity to work in the UK, the interaction between the two countries’ tax systems can be very confusing.

The best way to structure your affairs in a tax efficient manner begins with careful planning in advance. We are experts in US/UK tax and are here to help you, your family, and your finances to achieve the best outcomes.

Taking time to plan in advance can protect or secure reliefs and ensure your tax affairs are structured in the most tax-efficient way. Our team of UK and US tax experts can assist you with professional tax-saving strategies which help you keep more of your hard earned dollars and pounds.

Our team is an authority on US UK tax and is here to help you structure your tax affairs in the most tax-efficient way possible. We offer a wide range of tax advisory and accountant services including the following;

• – US Federal and State Income Tax Returns
• – UK Self Assessment Tax Returns
• – Expatriation Services
• – Personal Tax Planning and Advice
• – FBAR and ITIN Assistance
• – Company and Small Business Tax
• – Consultations
• – Streamlined Filing Package
• – CFC’s, Form 5471 and GILTI

In most cases, US expats require the services listed. However, if additional forms need to be completed, we have you covered! We offer US Expats who file their US taxes with us great offers on UK tax returns.

Xerxes Associates LLP is based in London and works 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.

If you have a query or would like a friendly no obligation conversation about your tax requirements then please get in touch and we shall be happy to assist you. To speak to an adviser about your US/UK Tax matters, please call us on +44 (0)207 411 9026 or email us via info@xerxesllp.com. Alternatively, you can send a message to the team now via our contact form.

Do American Citizens Living In London Need to Pay Taxes? In short, Yes! If you are an American living in London or the UK, you must file a US tax return and pay US taxes on your British income. You are subject to the same rules when it comes to income taxation as Amercians are living in the US.

There are generally two systems used globally to calculate taxes – these are ‘territorial-based’ and ‘residence-based’ taxation policies.

Territorial-based taxation systems tax individuals only on income from sources earned inside the borders of that country and residence-based taxation systems tax their local residents on all income earned from both local and foreign sources. As a US expat living in London or the United Kingdom, you are subject to the latter.

You can avoid filing a US tax return and paying US taxes abroad only by renouncing your US citizenship. Renouncing your US citizenship is a serious and permanent decision that shouldn’t be taken lightly. For US citizens and green card holders, filing a tax return and paying associated taxes is required.  However, it is possible to avoid double taxation and reduce your US tax bill using special tax credits, deductions, and exclusions available to Americans living in London and the UK, as explained here.

While living abroad, US citizens who fail to file their tax returns may face penalties, interest costs, or even criminal charges. The IRS charges financial penalties for both late filings and late payments. There are options available to you for late filings which may soften the response IRS takes against you.

There are a number of items you’ll need to report when it comes to filing your US expat taxes including your earned income and assets that exceed a certain amount. You may even have to pay taxes on your foreign retirement contributions. You should be familiar with the following three important additional tax requirements that apply to US citizens living in London and the United Kingdom.

● Foreign Bank Account Reporting
● Foreign Account Tax Compliance
● Tax Rules for Passive Foreign Investment Companies

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. 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.

Expats are often required to file and pay taxes in both the US and their country of residence because you are required to file and pay US taxes on worldwide income, no matter where you live or work. By using special tax credits and exclusions for living abroad that the IRS has put in place to help avoid double taxation, most expats living in the United Kingdom can reduce or eliminate their US tax bill entirely.

The US has strict tax laws and it can be difficult to understand the process completely. The information below outlines some of the important elements you need to know in order to better understand your US expat tax obligations with confidence.

All Expats must file US Federal tax returns every year if you have income from the following and if your worldwide income exceeds the filing threshold (which can vary by filing status).

● Wages and/or salary from sources in and outside of the US
● Interest from monetary investments
● Dividends from shares
● Rental Property Income

Regardless of your filing status, the threshold for self-employment is $400 (£300 approximately). Certain other conditions, including owing special taxes, may also require that you file.

The good news is that if you make a mistake on a previous US tax return, you can amend it. If you find that you have not reported some income or have not taken all the deductions, you are able to file an amendment via the form 1040X. Often, penalties are less steep if you file an amendment before the IRS notices the error.

Majority of Americans living in the UK or abroad elsewhere owe no taxes to the US. To prevent double taxation, the US has put in place several important deductions, exclusions, and credits to offset all of your expat earned income with the following:

● Foreign Earned Income Exclusion
● Foreign Tax Credit
● Foreign Housing Exclusion

For the exclusions, you must qualify as an official expat and have foreign earned income. You must also file your tax return in order to prove that you are eligible for these benefits.

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. 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 is an expert team of experienced US and UK tax accountants and advisors based in London. We specialise in meeting the needs of private clients and their businesses.

We offer a cost-effective tax advisory service for US citizens and residents from our London offices. Our US tax department is overseen by our certified agents who provide a specialised service for their clients, handling their tax returns and helping them manage their U.S. taxation responsibilities.

We understand there are a range of issues clients require assistance with including:

• – Completion of individual Federal US resident and non-resident tax returns (Form 1040 and Form 1040NR).
• – Streamlined filing for delinquent filers.
• – Preparing expatriation returns.
• – Preparing and submitting Foreign Bank Account Reports (FBAR) forms.
• – Completion of State Tax Returns.
• – Planning for moving to or from the US.
• – Planning of UK/US profit extraction from companies including the resolution of both the Repatriation Tax and the GILTI Tax.
• – Claims for Foreign Earned Income deductions.
• – Claims for Foreign Tax Credits.

Whether simple or complex, we can provide a clear quote and timeline specifically designed to your needs that will ensure you are fully compliant. Our tax advisors are double-qualified in UK and US tax, so are able to assist with both UK and US tax affairs. They can also provide expert advice on tax efficient structures designed to minimize exposure to UK and US tax, as well as reduce double taxation.

Tax complications can have a dramatic effect on your wealth, so it’s important to have a good understanding of the area you plan to explore. When there are competing tax systems like those between your home country USA and the UK, the situation is only further complicated as it opens up opportunities for tax evasion as well as fraud.

Whether you’re a start-up entrepreneur, a wealthy family with complex affairs, or an employed executive, our dual-qualified team of tax advisers will look after your personal tax affairs as well as those of your business. We have been helping our clients manage their tax affairs for over 10 years now and have built up the expertise to assist with the most complex returns and high net worth individuals and families.

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.

Being an expat in the UK can be very difficult – especially when you have to deal with the U.S tax process. Working with us makes it much easier! That’s why we are working hard to earn your trust. Our team works seamlessly, which means you only have to focus on what matters most – enjoying your overseas experience!

We provide US/UK tax advisory services to individuals across a variety of sectors and industries. We provide sound advice from start to finish by providing expert tax-related compliance guidance and assistance in navigating complex situations related to your taxation.

Xerxes Associates LLP specialises in meeting the specific needs of U.S. citizens abroad, and we have a team on hand to ensure that you comply with applicable U.S. tax laws so that you don’t get unnecessarily penalised for mistakes or misunderstandings. If you are a U.S. citizen or hold a green card, you are required by law to report your worldwide income (over certain threshold amounts) whether or not you owe money to the U.S. government.

When you file your U.S. Tax Return, it’s important to understand which credits and deductions you’re entitled to in order to minimise your overall U.S. federal tax liability. Our US and UK tax advisory specialists can guide you through each step of simple or complex situations ensuring that you get all the credits available to you no matter where in the United Kingdom you reside.

Xerxes Associates LLP provide a wide range of tax preparation services, including;

• – US FEDERAL AND STATE INCOME TAX RETURNS.
• – UK SELF ASSESSMENT TAX.
• – EXPATRIATION SERVICES.
• – PERSONAL TAX PLANNING AND ADVICE.
• – FBAR AND ITIN ASSISTANCE.
• – COMPANY AND SMALL BUSINESS TAX.
• – CONSULTATIONS.
• – STREAMLINED FILING PACKAGE.
• – CFC’S, FORM 5471 AND GILTI.

U.S. International Tax Planning

U.S. international tax planning is important for those who are living outside of the United States as it can help you to minimise your tax burden associated with conducting work domestically as well as abroad. At Xerxes Associates LLP, our tax advisory services support the cross-border activities of individuals helping them achieve their best tax result throughout the life cycle of their stay in the United Kingdom.

It’s important to keep on top of the ever-changing tax laws, especially if you’re an expat who lives abroad. Our experience allows us to provide effective solutions for almost any situation. We continue to investigate ways to help reduce your tax burden because at the end of the day, it all comes down to one thing; you’re entitled to be paid what you’re owed! With our unique expertise in U.S. expat taxes, we’ll help ensure that your interests are served right now.

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.

HMRC issues tax return forms to individuals working in the UK. If you have other incomes such as self-employment and/or investment income, then you will need to file a tax return and pay the taxes on those additional income streams. You will also need to file a tax return if;

• – If you have income from rental property.
• – Profited from selling stocks and/or shares.
• – You have profited from the sale of a second home.
• – Made capital gains from sales of assets.
• – Received an income from non-UK sources while residing in the UK.

Xerxes Associates LLP can assist you in the preparation of your tax return and further help you to claim any deductions available to you which can further reduce your tax liability and/or allow you to claim a ‘refund’ from HMRC.

If you have not received a tax form from HMRC and need to file one, please register online with HMRC. The sign up process can take up to 14 days to complete – so be sure to do so as soon as possible in order to avoid late filing penalties.

UK Tax Rates for US Expats;

• – Basic rate: 20% for earnings £0-£37,500
• – Higher rate: 40% for earnings £37,501-£150,000
• – Additional rate: 45% for earnings over £150,000

Please note there are some slight differences of the above rates for Scotland.

We can help in preparing and filing your UK & US taxes, including more complex filing requirements such as disclosure and streamlined foreign offshore procedures, tax planning and expatriation, consider giving Xerxes Associates LLP a call and we shall be happy to assist you.

Xerxes Associates LLP are specialist tax advisers for US and UK expats. If you have any queries or want to know more about how we can help you file your Tax Returns with efficiency, please use the contact details above or request a callback and we shall be happy to contact you at a more suitable time.

The UK tax system is known as Her Majesty’s Revenue & Customs or HMRC for short. HMRC operates as the Government tax collection agency for the United Kingdom. HMRC also helps regulate governmental policies such as national minimum wage and state support and welfare.

Key points to remember;

• – The UK tax year falls between April 6th – April 5th.
• – Your electronic UK tax return is required to be filed by the following January 31st.
• – Your paper tax return must be completed and filed by the following October 31st.
• – Automatic extensions are not granted and late submissions are assessed by HMRC on an individual basis but only if you meet certain conditions.

Like the US tax system, your tax is levied as you earn your salary, wages, business income, and investment income. Pay As You Earn (PAYE) taxes are the same as Payroll and include the following;

• – Your income tax.
• – National Insurance contributions.

The tax rate(s) is not set and is subject to change in accordance to your total earnings.

Married Couples – If you are married then you could be in a position to take advantage of the marriage allowance however, married couples are not able to file joint tax returns and are required to file individually.

Xerxes Associates LLP are specialist tax advisers for US and UK expats. If you have any queries or want to know more about how we can help you file your Tax Returns with efficiency, please use the contact details above or request a callback and we shall be happy to contact you at a more suitable time.

Xerxes Associates LLP are expert specialist UK & US tax advisers based in London with over 10 years of valuable experience. As UK and US Tax Accountants, we offer a professional, responsive and personalised service to all US and UK expats.

As UK & US Tax Accountants, Xerxes Associates LLP offer more than just the basic advisory and tax return preparation services. We also offer the following key services to expats in both the United States and United Kingdom.

• – US Federal and State Income Tax Returns.
• – UK Self Assessment Tax Returns.
• – US & UK Disclosures.
• – Personal Tax Planning and Advice.
• – FBAR and ITIN Assistance.
• – Company and Small Business Tax.
• – Streamlined Foreign Offshore Filing Procedure.
• – CFC’s, Form 5471 & GILTI TAX.
• – Exemplary Customer Service.
• – Other Expatriation Services.

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.

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.