US and UK Tax Accountants in the UK: Double Tax Treaties

Understanding Double Taxation for Cross-Border Creators

If you’re a US content creator living in the UK, you face one of the most confusing tax challenges: getting taxed twice on the same income. This happens because both the United States and the United Kingdom claim the right to tax your global earnings. That’s where US and UK tax accountants in the UK play a vital role.

The UK’s tax system differs from the US in how it defines residency and taxable income. The US taxes its citizens globally, regardless of where they live, while the UK bases taxation primarily on residency. Without proper planning, your YouTube earnings, brand collaborations, or merchandise sales could be subject to tax in both countries.

The solution lies in understanding the US-UK Double Taxation Treaty, a crucial agreement that prevents creators and other professionals from being taxed twice on the same income.

At JungleTax, we help American creators, freelancers, and entrepreneurs navigate these rules smoothly. Our US and UK tax accountants specialise in international compliance for digital entrepreneurs, ensuring your cross-border income remains fully optimised and compliant.

The Purpose of the US-UK Double Taxation Treaty

The Double Taxation Treaty between the US and the UK exists to protect taxpayers who earn income across both countries. It defines where and how income should be taxed — whether in the country of residence, the source country, or both — but with relief to eliminate double taxation.

For creators, this applies to various income types, including royalties, ad revenue, sponsorship payments, digital sales, and brand partnerships.

For example, let’s say you’re a US citizen living in London and earning from YouTube ads. The UK taxes your income because you live there, but the US also taxes your worldwide earnings. The Double Taxation Treaty ensures that the tax you pay in the UK is credited against your US tax bill, so you’re not paying twice.

US and UK tax accountants in the UK help you file the correct forms, such as IRS Form 1116 (Foreign Tax Credit), so you can claim every deduction and credit available.

Residency Rules: Where You’re Taxed Matters

One of the most misunderstood aspects of international taxation is residency status. The UK determines residency based on the Statutory Residence Test, which looks at where you live, work, and spend most of your time.

Meanwhile, the US automatically taxes its citizens no matter where they reside. So even if you haven’t lived in the US for years, you still have to file an annual US tax return.

US and UK tax accountants in the UK help creators clarify their tax residency status in both countries. For instance, if you’re a US citizen living full-time in London, you’re considered a UK resident but still a US taxpayer. However, you can avoid double taxation by using treaty relief mechanisms and the exemptions available under the agreement.

At JungleTax, our tax specialists frequently assist creators in proving residency status with both HMRC and the IRS to ensure taxes are correctly allocated.

Key Income Types Covered by the Treaty

The Double Taxation Treaty covers various income types relevant to digital creators and influencers. Here’s how it generally works for each:

1. Self-Employment or Business Income:
   If your influencer business operates from the UK, HMRC taxes that income first. You then report it on your US tax return, claiming a credit for UK tax paid.
2. Royalties and Licensing Fees:
   If you earn from music, videos, or content licensing, the treaty typically allows taxation in the country where you live. US and UK tax accountants in the UK help ensure correct reporting for platforms such as Spotify and YouTube.
3. Dividends and Investment Income:
   Many influencers invest profits in shares or funds. The treaty limits the tax that can be charged on these earnings in both countries, usually allowing a credit or an exemption.
4. Pension and Social Security:
   If you plan to stay in the UK long term, the treaty coordinates contributions and benefits, preventing double taxation of social security contributions.
5. Employment and Contract Income:
   For creators doing international brand deals, determining where the income originates matters. Accountants help classify payments correctly under treaty terms.

Real-life example: A US travel influencer based in Manchester earned sponsorship income from both UK and US companies. JungleTax structured her earnings so that UK taxes applied first, and the corresponding US liability was reduced through the Foreign Tax Credit.

The Foreign Earned Income Exclusion vs. Tax Credits

Two primary tools protect creators from double taxation: the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC).

• FEIE allows you to exclude up to $126,500 (for 2024) of your foreign-earned income from US tax if you meet particular residency or physical presence requirements.

• FTC provides dollar-for-dollar credits for taxes paid to the UK.

US and UK tax accountants in the UK help creators decide which option best suits their situation. For most UK-based digital creators, the Foreign Tax Credit is preferable because the UK’s tax rates are often higher than the US’s, thereby eliminating US liability.

Misusing either option can lead to compliance issues or missed credits. JungleTax ensures your returns reflect the right approach so your taxes remain efficient and penalty-free.

Avoiding Common Tax Mistakes for US Creators in the UK

Navigating dual tax systems can easily lead to errors, especially without professional guidance. The most common issues include:

• Failing to file annual US tax returns while living in the UK

• Misreporting foreign income from YouTube or brand deals

• Ignoring self-employment taxes owed in both countries

• Missing Foreign Bank Account Reporting (FBAR) or FATCA requirements

Our US and UK tax accountants in the UK manage every part of the compliance process, from dual filing to bank account disclosures. We also handle complex cases involving multi-currency transactions, brand sponsorships, and digital royalties.

Real-life example: A US fashion creator living in Bristol neglected to report UK earnings for three years. With JungleTax’s help, she used the IRS Streamlined Foreign Offshore Procedures to file back taxes, avoid penalties, and become fully compliant.

How to File as a US Creator in the UK

The filing process involves two parallel systems:

1. HMRC filing: You submit your UK Self Assessment tax return for all worldwide income.

2. IRS filing: You file your annual US return (Form 1040), along with supporting forms such as 1116 (Foreign Tax Credit) or 2555 (Foreign Earned Income Exclusion).

Our US and UK tax accountants in the UK ensure both returns align, preventing discrepancies that could trigger audits. JungleTax also manages foreign currency conversions, income classification, and treaty claims.

If you run your influencer business through a UK limited company, additional steps, such as corporate tax filings and payroll setup, apply. Our team handles these complexities seamlessly, ensuring you remain compliant in both countries while minimising tax exposure.

Why US and UK Tax Accountants in the UK Are Essential

Working with a specialist firm like JungleTax means your taxes are managed strategically, not reactively. We bridge the gap between US and UK regulations, ensuring your creative business operates efficiently across both markets.

Our team doesn’t just prepare tax returns — we design financial strategies tailored to creators, freelancers, and entrepreneurs with global reach. From VAT registration to dividend tax planning, we handle the whole financial lifecycle.

We’ve helped countless US creators in the UK recover overpaid taxes, structure their income effectively, and build sustainable financial systems aligned with international laws.

For expert help with your taxes, contact JungleTax today at hello@jungletax.co.uk or call 0333 880 7974.