As you will often hear us talk about, American citizens are almost the only people in the world who must do taxes to the country they are from, even if they don’t live there. Even when tax is not due, American citizens must do tax returns. This however does not usually have to mean paying tax twice. As an American in the UK knowing when your UK and US tax returns are due can be alot to keep track of.
With proper tax planning, there are a few provisions to avoid being taxed twice on the same income, these include the FEIC (Foreign Earned Income Exclusion), exclusions on foreign housing, and tax credits. However, even with these provisions it is still essential to know when tax returns are due.
As an American in the UK there are two different tax year periods to be conscious of. The American tax year runs, like the calendar year from January 1st to December 31st, while the UK tax year is from April 6th to the following year April 5th.
Tax Return Deadlines
As a US citizen living in the US you would likely have known that your tax returns are due by April 15th each year. As a US citizen living abroad, there is an automatic 2-month extension, moving the deadline to June 15th.
If you qualify for the 2-month extension but are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868, Application for automatic extension of time to file U.S. Individual Income Tax Return, before the automatic 2-month extension date.
Everyone in the UK, including US citizens, need to do their UK tax return for the HMRC by January 31st of the following year. About 10 months after the end of the UK tax year (April 5th of the previous year). That’s for an online tax return, but if you want to do a paper return it is due in the October after the end of the tax year (about 7 months after the end of the tax year).
Tax Payment Deadlines
Now for when payments are due, these dates are again different in each country. In the UK the HMRC calculates the taxes due and will issue a statement of account, which outlines the amount of tax due. This statement will typically be sent within a few weeks or months after the tax return is filed. Leaving the tax return until near the deadline will usually mean you get the statement of account and the expectation to pay the tax due sooner.
The tax payment deadline for the UK is usually January 31st following the end of the tax year. Once you receive the Statement of Account, it will specify the deadline for making the tax payment. This allows you time to review the calculation, verify the amount owed, and make the payment accordingly.
US taxes need to be paid by the same date that the return is due. Using the information at hand a US taxpayer is expected to make an estimation on their tax liability. The payment is made and later the actual tax amount owed is then reconciled when the tax return is processed with the IRS. If there is any difference between the estimated payment and the actual tax liability, it can result in either a refund or an additional payment.
Regardless of where you live, as a US citizen, you are required to file US tax returns and report your worldwide income to the Internal Revenue Service (IRS). This includes income earned in the UK. And as a resident in the UK you would also need to do a UK tax return. With many factors to consider, and variations as per one’s personal circumstances, we recommend checking the IRS and HMRC websites for the most up-to-date information. And to make things simpler speak to a tax professional such as our team at EDA Professional Services for personalised advice and assistance.
