Filing a Tax Return with HMRC for US Expats Living in the UK

Filing a Tax Return with HMRC for US Expats Living in the UK
October 13, 2017

Wondering if you need to file a local tax return in the UK with the HMRC? We take a look at some of the big questions US expats ask when it comes to tackling tax filing in the UK.

We know how it starts. You’re feeling great, as your move to the UK has been a raging success so far. You found a great place to live, work is going smoothly, and you are settling into the culture like a native. But all of a sudden, you begin to hear whispers around the water cooler that it is tax time again. At first, you’re thinking, “Surely that doesn’t apply to me too, right?”, but as more and more people start mentioning gathering information for their accountants, you start to wonder if you should be doing the same.

Do I need to file a return with HMRC?

If the only income you have received throughout the UK tax year is your salary from employment, and with benefits you earn under £100,000, there is a good chance that you will not need to send through a tax return. Your tax obligation will have been satisfied through the Pay As You Earn (PAYE) withholding that your employer has been deducting from your paycheck.

However, there is an equally good chance that you will have received income from another source during the year (from investments, for example) that would mean a return may be necessary. There is a great tool on the HMRC website that can help you determine whether a return is necessary or not (

Of course, if you receive a letter from HMRC requesting that you file a return, you will need to file a return even if no tax is due.

What does it mean to be domiciled? Am I domiciled?

Domicile is a complicated area, however, essentially, your domicile is your origin of birth. You will always return or intend to return to this place after any temporary periods away, no matter how long the period is. If your move to the UK is considered to be a permanent move and you intend to stay there for the rest of your life, there is a chance your domicile may have shifted from the US to the UK.

What about Social Security in the UK? Why do I have to pay it in the UK instead of in the US?

US expats who are employed or self-employed in the UK are required to pay UK National Insurance. This is the UK’s equivalent of Social Security and Medicare and helps to cover costs related to health and welfare.

To ensure expats are not having to pay into two systems, the US and the UK have an agreement known as a Social Security Totalization Agreement that dictates which system the expat will contribute to if technically the answer should be both. An exemption certificate (known as a Certificate of Coverage) will be issued and can be in place for up to 5 years.

What do I need to do before the 2016-2017 UK tax deadline of January 31, 2018?

First and foremost, determine if you need to file! If the answer is yes, and you have not filed a return previously with HMRC, you will need to register for your Self Assessment tax return by October 5, 2017 – or as soon as possible after. Once registered, you should receive a letter within 21 days that will contain your Unique Taxpayer Reference (UTR). You will then use this UTR in order to submit your online filing.

Still not sure if you need to file?

We’d love to help you get all your questions answered. One of our UK tax specialists would be happy to look over your situation and advise if a return is needed, as well as help you file your HMRC return. Contact us today to get started!

The IRS tax code is 7,000 pages. Want the cliff notes version for expats? Let us help.
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