Managing your taxes abroad can feel overwhelming, especially if you’re an American citizen living in the UK. While you enjoy your life overseas, the IRS doesn’t forget about you — and neither does HMRC. That’s where US and UK tax specialists for American citizens come in, bridging two tax systems and helping you stay compliant while protecting your earnings.
If you’re living, working, or investing in the UK, understanding your tax responsibilities under both systems is crucial to avoid double taxation, penalties, or missed deductions.
The Challenge of Being an American Expat in the UK
The United States is one of the few countries that taxes based on citizenship rather than residency. This means that no matter where you live, the IRS expects you to file an annual return. At the same time, the UK taxes you on your UK-source income and potentially on your global income if you are considered a UK tax resident.
This dual system creates a complicated tax situation — but it’s manageable with the proper guidance. US and UK tax specialists for American citizens, like JungleTax, are trained to help you meet both IRS and HMRC requirements while keeping your tax liability as low as possible.
Why American Expats Need Dual-Certified Tax Experts
Not every accountant understands the complexity of cross-border tax law. A general accountant may handle UK taxes perfectly but might not know how the IRS treats foreign tax credits, exclusions, or FATCA reporting. Similarly, a US-based CPA might not fully grasp UK tax residency rules.
A dual-qualified US/UK tax specialist helps you:
- File correctly in both countries.
- Use the Foreign Earned Income Exclusion (FEIE) to exclude part of your UK income from US taxation.
- Claim Foreign Tax Credits (FTC) for UK taxes paid.
- Avoid double taxation through the US–UK Tax Treaty.
- Navigate FATCA and FBAR reporting requirements.
Working with a team like JungleTax, which specialises in expat taxation, ensures no compliance gaps and maximised savings.
Key US Tax Responsibilities for Americans Living Abroad
Even while abroad, you must still meet certain US filing obligations each year. Here’s a quick overview:
- File an Annual US Tax Return (Form 1040):
You must report all worldwide income, even if earned in the UK. - Report Foreign Bank Accounts (FBAR):
If your total foreign bank account balances exceed $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114). - Comply with FATCA (Form 8938):
The Foreign Account Tax Compliance Act requires disclosure of certain foreign financial assets if they exceed reporting thresholds. - Self-Employment Tax:
Even if you work for yourself in the UK, you may owe US self-employment taxes unless covered by the US–UK Totalization Agreement. - State Taxes:
Some US states (like California or Virginia) may still consider you a tax resident even if you’ve relocated abroad.
UK Tax Responsibilities for American Citizens
The UK system determines residency using the Statutory Residence Test. If you’re classified as a UK resident, you’ll likely pay tax on your worldwide income. Key areas to consider include:
- Income Tax: Paid on employment, self-employment, or pension income.
- Capital Gains Tax: Owed when selling assets like property or investments.
- National Insurance Contributions: May apply depending on your employment status.
- Dividend and Interest Income: Both are taxable under UK rules.
However, careful coordination between your US and UK filings can prevent paying tax on the same income twice.
Avoiding Double Taxation: The US–UK Tax Treaty
The US–UK Double Tax Treaty exists to protect you from paying taxes twice on the same income. It allows you to:
- Claim credits for taxes paid in one country when filing in the other.
- Determine which country has taxing rights over specific types of income.
- Avoid double social security contributions under the Totalization Agreement.
Understanding the treaty is complex — it includes detailed rules for passive income, pensions, and capital gains — but US and UK tax specialists for American citizens handle these nuances for you.
Common Mistakes American Expats Make
Even with good intentions, many expats make costly mistakes. Here are the most common ones:
- Failing to file US taxes because they assume living abroad exempts them.
- Failure to file FBAR or FATCA returns will result in severe penalties.
- Ignoring exchange rate differences when converting UK income to USD.
- Not claiming eligible deductions or credits, such as housing exclusions.
- Hiring local accountants unfamiliar with US tax law.
Avoiding these errors saves time, money, and stress — and professional help is often more affordable than fixing mistakes later.
Benefits of Hiring US and UK Tax Specialists
Partnering with a firm like JungleTax provides peace of mind. Here’s what you gain:
- Cross-border expertise: Specialists are familiar with both IRS and HMRC rules.
- Tailored tax planning: Strategies to reduce liability based on your unique income mix.
- Efficient reporting: All forms (1040, FBAR, FATCA, etc.) are handled accurately and promptly.
- Long-term compliance: Ongoing advice ensures you stay compliant year after year.
- Peace of mind: You focus on life abroad while experts handle the paperwork.
If you’re self-employed, investing, or running a business in the UK, you’ll benefit even more from having a dedicated accountant who understands your expat profile.
How JungleTax Supports American Citizens in the UK
At JungleTax, we work with US expats at every stage — from those newly relocated to long-term residents. Our team provides:
- Comprehensive US–UK tax filing support.
- Guidance on foreign tax credits and treaty benefits.
- Assistance with FATCA and FBAR reporting.
- Ongoing tax planning and advisory services.
Our goal is to ensure that every American in the UK stays compliant and keeps more of their hard-earned income.
Final Thoughts
As an American living abroad, you shouldn’t have to navigate two tax systems alone. Working with US and UK tax specialists for American citizens simplifies compliance, reduces stress, and optimises your financial outcomes.
Whether you’re freelancing, working for a UK employer, or managing global investments, professional guidance is essential to stay tax-efficient in both countries.
Call to Action:
For expert help with your taxes, contact JungleTax today at hello@jungletax.co.uk or call 0333 880 7974.
FAQs
Yes, all U.S. citizens are required to file a U.S. tax return annually, even if they reside abroad. You may qualify for exclusions or credits to reduce your liability.
The US–UK Tax Treaty and Foreign Tax Credit system help prevent double taxation, ensuring you’re not taxed twice on the same income.
Failing to report foreign bank accounts can result in severe penalties. A tax specialist can help you file late reports through streamlined procedures.
Yes. Under the Foreign Earned Income Exclusion, you may exclude up to a set limit (adjusted annually) of your foreign income from US tax.
JungleTax specialises in cross-border tax services for Americans in the UK, ensuring full compliance while minimising your tax bill.