Tax over 100k U.K.
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As a US citizen earning over £100,000 per year in the UK, what tax filing requirements do I have?
As a U.S. citizen working in the UK and earning over £100,000 per year, you will have tax filing requirements in both the UK and the United States. This response provides a general overview, but it is always advisable to consult with a tax professional to ensure compliance with all applicable laws and regulations.
Filing taxes with HMRC in the United Kingdom:
Self-Assessment Tax Return: If you’re earning over £100,000 per year, you will typically need to file a Self-Assessment tax return with HM Revenue and Customs (HMRC) by the following deadlines:
Paper returns: October 31st after the end of the tax year
Online returns: January 31st after the end of the tax year
Paying Income Tax: As a higher earner, you will be subject to the UK’s higher and additional income tax rates. Income tax rates and bands may change each tax year, so it is important to stay updated on the current rates. In addition to income tax, you will also need to pay National Insurance contributions if you meet the eligibility criteria.
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Filing taxes with the IRS in the United States:
Federal Tax Return: U.S. citizens are required to file a federal income tax return with the Internal Revenue Service (IRS) annually, regardless of where they live and work. The deadline for filing is generally April 15th of the following year, although you may qualify for an automatic two-month extension if you are a U.S. citizen living abroad.
Foreign Earned Income Exclusion (FEIE): To avoid double taxation, you may be eligible for the FEIE, which allows you to exclude a certain amount of foreign-earned income from U.S. taxes. The exclusion amount is adjusted annually for inflation.
Foreign Tax Credit: You may also claim a foreign tax credit on your U.S. tax return for income taxes paid in the UK. This credit reduces your U.S. tax liability on a dollar-for-dollar basis.
Foreign Bank Account Reporting (FBAR): If you have financial accounts in the UK that exceed a certain threshold, you may be required to report these accounts to the U.S. Department of the Treasury using the FinCEN Report 114, also known as the FBAR.
Foreign Account Tax Compliance Act (FATCA): Under FATCA, you may need to report certain foreign financial assets to the IRS using Form 8938 if the total value of these assets exceeds the specified reporting threshold.
It is important to consult with a tax professional who is experienced in both UK and U.S. tax laws to ensure compliance with all filing requirements and to minimize your tax liability.
Check out our simplified tax guide for US citizens living and working in the U.K.
Request a US filing extension here, so you can file by October 15th
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