Tax Services for US Expats in the UK: 2025 Filing Guide

US Expat Tax Season 2025: What to Expect in the UK

The 2025 US tax season is approaching, and over 200,000 American nationals residing in the United Kingdom should prepare early. Even if you live and work full-time in the UK, the United States still requires you to file annual federal tax returns. Understanding tax services for US expats in the UK is crucial, as filing incorrectly can result in costly penalties and lost tax credits. This guide explains what US citizens living in the UK need to know for the 2025 filing season.

Why Do US Expats Still Have to File US Taxes?

The United States taxes based on citizenship, not residency. That means:

• You must report worldwide income

• You must file Form 1040 every year.

• You may also be required to complete an additional reporting form.s

Even if your entire life is now in London, Manchester, or elsewhere in the UK, your IRS obligations do not disappear. Failing to file can lead to penalties that increase over time.

What is Changing for Expats in 2025?

Several IRS updates take effect for the 2025 tax year:

• Higher standard deduction amounts

• Increased Foreign Earned Income Exclusion (FEIE)

• Updated foreign tax credit rules

• Continued FATCA enforcement

These changes affect US expat tax filing in the UK and may improve your ability to avoid double taxation.

For detailed rules and UK tax residency guidance, you can also visit:

• https://www.gov.uk/income-tax
  

• https://www.gov.uk/guidance/income-tax-when-coming-to-the-uk

Filing US Taxes While Living in the UK: Main Requirements

Most US expats in the UK must file:

• IRS Form 1040

• FBAR (FinCEN Form 114) if UK accounts exceed $10,000 total

• FATCA Form 8938 if assets exceed thresholds

• Self-employment income reporting

• Pension, rental, or investment income forms where relevant

Even if you owe zero US tax because of UK tax paid, filing is still mandatory.

UK Tax Responsibilities for American Expats

You will usually pay income tax to HMRC as a UK tax resident. This includes:

• Pay As You Earn (PAYE) if employed

• Self-assessment returns if required

• National Insurance contributions

Your UK tax payments are necessary because they can lower or eliminate US tax through credits.

US-UK Tax Treaty: Avoid Paying Twice

The US-UK tax treaty helps you prevent double taxation through:

Foreign Tax Credit (FTC)

Credits for UK tax paid against US tax due.

Foreign Earned Income Exclusion (FEIE)

For 2025, the expected FEIE limit is approximately $126,500, with inflation adjustments.

Pension Relief

Helps prevent double taxation on contributions and distributions.

Maximising these benefits requires correct filing and documentation.

IRS Tax Deadlines for Expats in 2025

Here is the filing calendar for Americans living in the United Kingdom:

• 15 April 2025: Standard deadline and tax payment due date

• 15 June 2025: Automatic extension for US citizens abroad

• 15 October 2025: Extended deadline if Form 4868 is filed on time

• FBAR Deadline: 15 April with automatic extension to 15 October

Late filings can trigger penalties, even if you owe nothing.

FATCA and Foreign Bank Account Reporting

FATCA requires UK banks to share information about American accounts with the IRS. Expats must report if:

• Foreign accounts total more than $10,000 (FBAR threshold)

• Assets exceed $200,000 for singles abroad (FATCA threshold)

Penalties for non-compliance include:

• Up to $10,000 per FBAR violation (non-wilful)

• Up to $100,000 or 50% of account value (wilful)

Professional support helps ensure accurate reporting.

Will You Owe US Tax If You Pay UK Tax?

Not always. However, tax may still apply if:

• UK tax rates are lower than US rates on certain income

• You are self-employed and owe US Social Security tax.

• You invest in UK funds treated as passive foreign investment companies (PFICs)

• You withdraw pensions early.

Good planning reduces exposure to double taxation.

Self-Employed American Expats: Extra Rules Apply

If you run a business or freelance in the UK, the IRS applies:

• US self-employment tax, even while abroad

• UK National Insurance contributions depend on status.

Corporation owners must follow complex US rules, such as:

• CFC reporting

• GILTI regulations

Tax services for US expats in the UK help ensure full compliance and prevent double social tax payments.

Child Benefits and Credits for Expats

American expats with children may qualify for:

• UK Child Benefit

• US Child Tax Credit (CTC)

• Additional Child Tax Credit (ACTC)

Claiming incorrectly can delay refunds and lead to IRS reviews, so it is recommended to coordinate filings.

Moving to the UK in 2025: Tax Checklist

When relocating, be sure to:

• Track days in and out of the UK for tax residency status

• Update your address with the IRS.

• Maintain complete income records.

• Open UK accounts with the documentation store.d

• Plan early for pensions and retirement savings.gs

The first year sets the foundation for long-term tax savings.

Why US Expats Choose JungleTax

Managing two tax systems independently can feel overwhelming. JungleTax provides:

• Combined US and UK tax services

• IRS-recognised expat tax specialists

• FATCA and FBAR compliance

• Clear communication in one place

• Transparent pricing for US expats

You gain confidence knowing every form is filed correctly and on time.

Benefits of Professional Expat Tax Services

Choosing expert support helps you:

• Reduce tax obligations legally

• Avoid costly errors and penalties.

• Protect investments and pensions.

• Save time each year

• Focus on your life abroad instead of compliance stress.s

Smart tax support can save you thousands over time.

Conclusion

With careful planning, the 2025 tax season can be easily managed. Whether you are a new UK resident or have lived abroad for many years, using tax services for US expats in the UK ensures that you remain compliant with both HMRC and the IRS. You can avoid double taxation, secure reliefs available under the tax treaty, and protect your income for the future.

Call-to-Action

Ready to optimise your finances with expert guidance? Contact JungleTax today at hello@jungletax.co.uk or call 0333 880 7974 to speak with our specialist accountants.