Missed UK Tax Returns: Claiming Credit for Late US Tax

Yes: after missed UK tax returns, US tax paid late can usually still be credited. TIOPA 2010 section 19 allows a claim until the later of four years after the UK tax year ends and 31 January following the tax year of payment. Interest and penalties never qualify.

That second limb is the subject of this guide, written by Jungle Tax for UK-resident Americans completing an IRS catch-up. Published material on foreign tax credit relief overwhelmingly assumes the foreign tax was withheld on time and the UK return filed on time. What it rarely covers is the case where both happen late together, and where the deadlines of two systems, a calendar-year US liability and a three-year US lookback, have to be mapped onto an April-to-April UK year that may be open, closed or never filed.

Who is in this position, and why does the UK credit arise at all?

The fact pattern is specific. You are a US citizen or green card holder living in the UK, taxable here on worldwide income. You also hold income the US may tax as source state whatever your citizenship: rent from US real property, profits of a US business, pay for workdays physically spent in the US, or a gain on US real property. You did not file Forms 1040 for some years, so the federal tax on that income was not paid until a catch-up submission. Meanwhile the same income was either left off a UK return or no UK return was filed.

Under the UK-US double taxation convention, the order of relief then matters more than people expect:

• Article 6, 7, 13 and 14 income: these provisions leave the US free to tax the relevant real property income, business profits, real property gains and US-performed employment, subject to their conditions.
• Article 24(4) and (5): the UK allows US tax on US-source income as a credit against UK tax on the same income, subject to UK domestic credit rules. Income the US may tax under the convention is treated as US-source for this purpose.
• Article 24(6): for a US citizen resident in the UK, the UK credit is limited to the US tax that could have been charged on a UK resident who is not a citizen. The US then credits the UK tax remaining after that UK credit, and that US credit does not reduce the amount creditable in the UK.

So the UK normally moves first on this income. Where US tax has been paid only now, the UK computation for the matching year cannot be finalised until it is known, whether or not that UK year has been filed.

How does the TIOPA time limit actually run against the UK year?

Section 19 TIOPA 2010 sets the limit for a claim under section 18(2). For foreign tax on income or gains charged to income tax or capital gains tax for a tax year, the claim must be made by the later of:

1. the fourth anniversary of the end of that tax year; and
2. 31 January following the tax year in which the foreign tax is paid.

INTM162560 confirms this with an example: 2010-11 income, foreign tax paid in July 2015, claim open to 31 January 2017. Three consequences follow for a catch-up:

• The clock is tied to the payment, not to the US return. A remittance made in November 2026 falls in 2026-27, so the second limb runs to 31 January 2028 for every US year settled by that payment, however old.
• Each payment has its own limb. If a balance is settled in stages, or the IRS later bills a further amount, payments crossing 5 April carry different dates. A schedule is needed for each payment, not each return.
• It is short. A remittance in the final days of a tax year may leave little over nine months to prepare UK computations for several years.

The section is also more generous than a view you will find circulating among practitioners, that late foreign tax can only be relieved through an amended return or overpayment relief. Those routes are limited, but section 19 is its own statutory time limit, and where it is open we prefer to claim under it directly and treat overpayment relief as a separate question.

Do not lean on the six-year rule

Section 79 disapplies normal time limits where a credit given becomes excessive or insufficient because tax is adjusted, allowing a claim up to six years after all material determinations. It looks made for a late IRS liability, but INTM162570 states HMRC's position plainly: it applies only where credit has already been given and the tax payable has been adjusted, and a foreign country taxing a UK resident on income for the first time is not an adjustment. A first-time Form 1040 for a non-filed year is close to that description. Treat section 19 as the operative deadline. Section 79 is more likely to help where a credit has been claimed and the IRS later increases the bill.

A timeline for one November 2026 payment

The table below is our own construction. It assumes a streamlined submission with all US tax and interest paid on 12 November 2026, in UK tax year 2026-27.

UK tax year	Fourth anniversary limb	Payment limb (paid 2026-27)	Effective deadline	Is US tax actually available?
2021-22	5 April 2026 (gone)	31 January 2028	31 January 2028, only for US tax of that year paid in 2026-27	Usually none: outside the three-return lookback
2022-23	5 April 2027	31 January 2028	31 January 2028	Partial: 95 days of US 2023 only, unless 2022 is also filed
2023-24	5 April 2028	31 January 2028	5 April 2028	Yes: US 2023 and 2024
2024-25	5 April 2029	31 January 2028	5 April 2029	Yes: US 2024 and 2025
2025-26	5 April 2030	31 January 2028	5 April 2030	Partial until the US 2026 liability is settled

The last column is the point the published guidance misses. A US calendar year does not line up with a UK year. INTM161220 says that where tax is directly assessed on a different basis period, it may need apportioning, generally by days, and uses calendar-year rent for the year to 5 April 2023 as its example: 270 days of the 2022 tax and 95 days of the 2023 tax. Any reasonable alternative must be applied consistently. The earliest UK year in a catch-up therefore often gets only a fragment of the credit needed.

Worked example: what a late credit is worth

Illustrative figures only, simplified for clarity; not a computation for any real taxpayer. A London-resident US citizen owns US commercial property directly and pays UK tax at 45% on the top slice. A single illustrative rate of $1.28 to £1 is used, whereas a real claim converts each liability separately. All US figures are federal tax attributable to that rent.

Item	UK 2022-23	UK 2023-24
Rental profit, UK measure	£380,000	£400,000
UK tax at 45%	£171,000	£180,000
US 2022 tax (not in lookback, unpaid)	Nil paid	n/a
US 2023 tax $150,000	95/365 = $39,041	270/365 = $110,959
US 2024 tax $160,000	n/a	96/366 = $41,967
Creditable US tax in dollars	$39,041	$152,926
Credit in sterling (below UK tax cap)	£30,501	£119,474
UK tax remaining on this income	£140,499	£60,526

Three readings matter:

• Interest is excluded. If the IRS interest across these years came to $34,000, none of it enters the table.
• Missing the claim is expensive. For 2023-24, a deduction of £119,474 under section 112 instead would save 45% of that sum, £53,763, against a £119,474 credit: a £65,711 difference on one year.
• The 2022-23 gap is real money. Had the 2022 tax of, say, $145,000 also been established and paid, a further $107,260 (270/365), or about £83,797, could have been in play. Whether a year outside the required lookback should be filed is a decision taken on the full US facts, not simply because of the UK credit. Tax must also be a proper charge under US law and be actually paid.

What if the UK return is still unfiled?

A missing return does not stop the credit, but it changes the mechanics. The four main situations differ.

A notice to file stands and no determination has been made

File the return with the SA106 foreign pages. Helpsheet HS263 covers the working sheets and suggests using the additional information space to explain the calculation. In our view that space should disclose late payment dates, the apportionment and the section 19 limb relied on. Late filing penalties and UK interest are separate exposures and the credit does not erase them, though tax-geared amounts should be tested against the liability after credit.

HMRC has issued a determination

A determination stands as the assessment until displaced by a return-based self assessment, and TMA 1970 section 28C limits when that can happen. If that window is closing, check the date before anything else, because it can arrive earlier than the section 19 date and removes the simplest vehicle for the claim.

No notice was ever issued, or the year is being cleared by disclosure

Where the catch-up goes through a disclosure, tax is agreed in a computation rather than a conventional return. We would state the credit claim expressly in the submission, with the section 19 analysis, rather than assuming a net figure amounts to a claim. HMRC's guidance does not specifically address streamlined payments, so this is a judgement to be confirmed case by case.

A return was filed but omitted the income

Once the amendment window has passed, the credit is a claim outside the return, again governed by section 19. Any additional tax will be reached by HMRC assessment or disclosure, so the two must be aligned.

What if HMRC reaches a year that section 19 has already closed?

This is the sharpest mismatch. Section 36A TMA 1970 allows HMRC 12 years on offshore matters where tax is lost, subject to its exceptions. Now take an American who paid US tax on time in 2019 for a 2017-18 UK year but never reported the income in the UK. Both section 19 limbs have gone, yet HMRC could still assess that year.

INTM162560 offers two limited pointers. It records that a notice of intention to claim may be accepted, but only if the claimant agrees to set the credit against UK liability otherwise out of date for assessment. It also notes that, where no credit claim is made, relief as a deduction under section 112 applies, and that further extensions are very rare.

The stronger argument is statutory. Section 36(3) TMA 1970 says that where the person so requires, an assessment under section 36(1) or (1A) must give effect to any relief to which they would have been entitled on a claim made within the permitted time. Section 36A(11) applies the same provisions to 12-year assessments. Raising this requires an actual assessment or an agreed basis, not simply a late return filed unprompted, and we have not found HMRC guidance applying it to this precise case. It should be asserted in writing, not assumed.

What counts as creditable US tax, and what does not?

INTM161250 supplies most of the limits. Foreign tax must be a proper charge under foreign law and payable under any treaty. It must be the final liability, not an amount on account, and interest and penalties paid abroad in respect of the tax do not count. Applied to a US catch-up:

• Interest and penalties. Statutory interest accompanies every streamlined submission, and any failure-to-file or failure-to-pay charges on assessed years are excluded too. Both are removed before the claim.
• Minimisation. Section 33 caps credit at what would have been payable had you taken all reasonable steps under US law and the convention. A lazily prepared catch-up 1040 that ignores available deductions gives HMRC a limit to apply.
• Treaty-capped income. Article 24(6) limits UK credit to what could be charged on a non-citizen UK resident. On US dividends or interest, that can be far below the US tax actually shown on the citizen's 1040.
• The UK cap. Section 36 limits credit source by source to the UK tax on that income, and the excess is not refunded by HMRC. US and UK measures of rent commonly differ, not least over depreciation.
• State tax. The treaty's US list refers to federal income taxes and excludes social security taxes. State income tax needs separate treatment under section 9 unilateral relief, which expressly contemplates state-level taxes.
• Other federal charges. Self-employment tax falls outside the covered list. Net investment income tax should be analysed separately, not assumed creditable.
• Remittance basis or FIG years. Credit follows income actually charged in the UK. Income relieved under the four-year foreign income regime, or unremitted in earlier years, needs separate review.

What foreign-tax-paid evidence will HMRC accept?

INTM162520 points officers to the overseas assessment notice and computation plus tax receipts. If that is not practicable, other satisfactory evidence may do if vouched by an independent party such as a bank. Parts of the page are withheld, so it should not be read as a closed list. INTM162530 adds that proof need not accompany a self assessment return but must be obtained, kept and available on enquiry. No HMRC page we found lists US documents, so the mapping below is our practice view:

Evidence item	What it proves	Common weakness in catch-up cases
Signed Form 1040 and schedules as filed	Computation of the charge, by income item	Tax not attributed to the specific UK source
IRS account transcript for each year	Assessment, separate tax, interest and penalty entries, and payment credit	Obtained before processing, showing nothing yet
Bank confirmation of each payment	Independent proof of date and amount	One payment covering several years, unallocated
IRS notices following processing	Any change to the amount filed	Not reconciled to the credit claimed
Apportionment and sterling schedule	Days, rate and date used for every UK year	Inconsistent method between years
State returns and receipts	State tax for section 9 relief	Merged with federal tax

HMRC has issued one-to-many letters on foreign tax credit relief claims in recent years, so assume these claims will be read, particularly where a large credit first appears on a late return.

Which exchange rate applies when the tax is years late?

INTM162620 converts foreign tax at the rate on the date it becomes payable. If that date is unknown the payment date can normally be used, but where the tax is substantial or disputed the actual payable date should be established. With a late federal liability, the statutory due date and the date of actual payment can be years apart. On seven-figure tax, a move in the dollar is material, so choose a defensible basis, document it and apply it consistently.

How do the US and UK sides compare?

Issue	US / IRS	UK / HMRC
Catch-up route	Streamlined Foreign Offshore Procedure: three years of returns, six years of FBARs, Form 14653	Late returns, or a disclosure where appropriate
Lookback	Fixed by the procedure, though wider exposure is not erased	4, 6, 12 or 20 years depending on behaviour and offshore status
Interest	Paid with the submission	Runs on late UK tax; not relieved by credit for IRS interest
Penalties	Listed penalties not applied to eligible compliant filers; earlier assessed penalties not abated	Late filing, failure to notify or inaccuracy regimes, potentially with offshore uplift
Relief for the other country's tax	Credit for UK tax left after the UK credit (Article 24(6))	Credit for US tax, limited as above, by the section 19 date
Later change	Foreign tax redetermination or amended return	Section 79 for six years; section 80 notice within one year

The IRS terms for taxpayers residing abroad require tax and statutory interest to accompany the submission. They do not close the door on audit, and a further IRS adjustment could alter the UK credit in either direction. Our streamlined filing team prepares the US side with this interaction in view.

The right order of work

This checklist reflects how we would sequence a typical case, because getting the steps out of order is what usually costs money:

1. Map every year. List US calendar years against UK years, marking filed, unfiled, determined or closed, with the section 19 and section 28C dates for each.
2. Confirm which income carries US primary rights under the treaty, item by item, separating what is treaty-limited.
3. Complete the US computations on a minimised basis, drafting them alongside a UK estimate so that the Article 24(6) residual credit can be handled.
4. Make the payment deliberately. Note which UK tax year it falls in, allocate it by year and separate tax from interest. The date fixes the second limb.
5. Collect the evidence as soon as the IRS has processed the returns and diarise the claim date immediately.
6. File or submit the UK years with express claims, explaining payment dates and apportionment, and assert section 36(3) wherever an old year is assessed.
7. Finish the US reciprocal step once UK tax is settled, using amended US returns where required.
8. Monitor for changes. Any IRS reduction starts the section 80 one-year notice. Failure risks a penalty of up to the excess credit.

For readers with several income sources, our US-UK tax accountants and high-net-worth team run this as one joined-up file across both countries.

Bring the file together before the date passes

Late US tax does not forfeit UK relief, but the second section 19 limb is short and the first one continues to expire year by year. If you have already paid the IRS, or are about to, the payment date has probably set your UK deadline. Jungle Tax prepares both sets of returns for wealthy US-UK families and founders, in strict confidence. Please contact our cross-border team for a confidential consultation, ideally before the US remittance leaves your account.