US Expat Tax Advice When Living In the United Kingdom

US Expat Tax Advice When Living In the United Kingdom

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.