U.S. Tax Guide for Americans Living in the United Kingdom (England)



 

Our UK Phone Number: 020 3129 8742

At TFX we've been preparing U.S. taxes for Americans living in the U.K. for over 22 years. 

 

As you probably already know, all U.S. Citizens or green card holders are legally required to file a U.S. tax return each year regardless of where they live and where the income is earned. The good news is that most people don't have to pay anything to the IRS due to the taxes they already pay in the UK and various deductions and exclusions available to expats.

 

In this document we will explain a number of tax concepts that will be important to you as a UK resident and also explain how to report the details of your UK life on our Tax Questionnaire.

Basic UK Tax Questions

 

1. Who is considered a UK Resident?

2. What is a Domicile?

3. Is Foreign Income Taxed in the UK?

4. What is the UK income tax rate?

5. What is the UK tax year?

6. What is the UK tax due date?

7. How do you account for different tax years between US & UK?

8. What UK tax forms can I expect to receive?

9. Do I have to complete a UK tax return?

10. What other taxes aside from Income Tax should I be aware of?

 

VAT

Unlike the US in the U.K. there is no sales tax. Instead there is something called a Valued Added Tax (VAT) an it's already calculated in the price of goods. What it means is that the price you see is the price you pay at the till or checkout. Right now the VAT is set at 20% (having been raised from 17.5% in January 2011). It is applied to most goods/services except children's clothes, fresh food products and books/magazines. For more information please see the HMRC Web Site or this article from the Telegraph.
 

Council Tax

Council Tax is the British equivalent of property tax. It is paid by tenants/residents and not landlords of rented property. You can find more information about U.K. Taxes at Direct.gov.uk.