US UK Accountant for First-Time Filers for Americans in London

A US UK accountant for first-time filers for Americans in London begins with residence determination, not paperwork. The first engagement establishes your UK residence position, fixes which return is prepared first, identifies the information returns you almost certainly owe, and sequences everything against two tax calendars that never align.

What the first engagement actually covers

Most Americans who move to London discover their filing obligations in the wrong order. They learn about the UK Self Assessment return from a colleague, file it late, then find out in year two that the IRS expected a return the whole time, that a Treasury form called the FBAR was due independently of the tax return, and that the tidy stocks and shares ISA their UK bank recommended is a stack of passive foreign investment companies requiring a separate US form for each holding.

A properly run first engagement prevents that sequence. At Jungle Tax the first year is treated as an architecture project rather than a compliance chore, because the positions you take in year one — residence, treaty elections, credit versus exclusion, pension treatment — become defaults that are expensive to unwind later. The work divides into four phases: intake and residence determination, information-return scoping, preparation in the correct order, and the standing calendar you inherit for every subsequent year.

Phase one: intake before any form is touched

Nothing is prepared until the facts are fixed. A first-year intake for an American in London should establish, at minimum:

• Your arrival date in the UK, your departure date from the US state you left, and every day spent in the UK and the US across the relevant tax years.
• Your immigration category and intended length of stay — this affects UK residence, domicile-adjacent questions, and whether the UK's four-year regime for new arrivals is available.
• Whether you retain a US state connection. California, New York, New Jersey, Virginia and South Carolina are notably reluctant to release departing residents, and a state return can survive a move abroad entirely.
• Every financial account you hold anywhere, including accounts you do not consider yours: joint accounts with a non-US spouse, accounts you hold as signatory for an employer, dormant accounts, and pensions.
• Your equity compensation position — grant dates, vest dates and the countries you worked in between them, because cross-border sourcing of RSUs and options is the single most commonly mishandled item in a first-year file.
• Whether you own or control a company anywhere, including a UK limited company you set up to contract through.
• Your marital position and your spouse's citizenship, which drives filing status, whether a non-US spouse should be brought into the US system, and how UK jointly held assets are reported.

Phase two: residence determination

The US and UK ask entirely different questions about you, and both answers are required before a single number is entered.

The US asks nothing about where you live. If you are a US citizen or green card holder, you file a Form 1040 reporting worldwide income for every year your income exceeds the filing threshold, regardless of how long you have been outside the country. Residence affects the reliefs available to you, not the obligation itself. The IRS sets out this position for US citizens and resident aliens abroad.

The UK asks a mechanical question through the Statutory Residence Test. The test runs in a fixed order: automatic overseas tests first, then automatic UK tests, then the sufficient ties test, which weighs your family, accommodation, work, prior-year presence and comparative country ties against your day count. HMRC's summary of how residence drives your exposure to foreign income sits on the GOV.UK residence guidance, and the underlying legislation is applied strictly — day counting is evidential, not approximate.

Because the UK tax year runs 6 April to 5 April and the US year runs to 31 December, an arrival almost never lines up with either. Where the conditions are met, split-year treatment divides your first UK tax year into a non-resident part and a resident part, so only post-arrival income falls into the UK net. Getting split-year treatment right in year one is worth more than any other single decision in the file, because it determines the size of the UK liability that then feeds your US foreign tax credit.

Phase three: the four-year regime for new arrivals

The UK's treatment of new arrivals changed substantially from 6 April 2025. The remittance basis and the domicile-based system that governed non-doms for decades were replaced by a residence-based regime offering, to individuals who have not been UK resident in the preceding ten tax years, a four-year window in which qualifying foreign income and gains can be claimed free of UK tax. A newly arrived American with meaningful US-source investment income, rental property or business interests should have this tested in the first engagement — but tested carefully, because claiming the relief costs you the UK personal allowance and the capital gains annual exempt amount, and because relieving income from UK tax removes the foreign tax credit that was sheltering it from US tax. Relief on one side of the Atlantic frequently manufactures a bill on the other. This interaction is the reason a first-year file should be modelled by someone who prepares both returns rather than split between two national specialists who never see each other's figures. Our cross-border tax planning work exists precisely at this seam.

Which return is prepared first, and why?

For an American resident in London, the UK return is prepared first in substantially every case. The reason is mechanical: your UK income tax liability is the input to the foreign tax credit on your Form 1116, and you cannot claim a credit for a figure you have not yet determined. Preparing the US return first forces an estimate, and an estimated credit produces an amended return later.

There is a second reason, which is that the UK deadline comes first in real time. The Self Assessment filing deadline of 31 January follows the 5 April year end by under ten months; the US return for the overlapping period is not finally due until the following October. The natural workflow therefore runs UK first, US second, with the US return prepared once the UK liability is settled and the UK tax actually paid.

Item	United States (IRS)	United Kingdom (HMRC)
Tax year	1 January – 31 December	6 April – 5 April
What triggers filing	Citizenship or green card, wherever you live	Residence, plus UK-source income for non-residents
Registration step	None; you file when the threshold is met	Register for Self Assessment by 5 October following the tax year
Standard filing deadline	15 April	31 January online; 31 October on paper
Automatic extension abroad	15 June, extendable to 15 October	None — the deadline is the deadline
Payment timing	Tax due 15 April regardless of extension	31 January balancing payment; payments on account 31 January and 31 July
Late filing penalty	Percentage of unpaid tax; separate failure-to-pay charge	£100 fixed penalty from day one, escalating at three, six and twelve months
Foreign account reporting	FBAR and Form 8938, separate from the return	No equivalent standing disclosure form
Typical first-year outcome	Often no US tax after credits, but returns still required	Usually the substantive liability for a London-based earner

Two practical points follow. First, the 5 October registration step catches first-timers repeatedly. If you have income that HMRC does not already tax at source — self-employment, rental profit, dividends above the allowance, foreign income, or a capital gain — you must notify HMRC by 5 October following the end of the tax year concerned, and a failure-to-notify penalty is chargeable independently of any late-filing penalty. Second, US tax is due on 15 April even where the filing date is extended. The June and October dates extend the time to file, not the time to pay, and interest runs from April on anything owed.

The information returns a first-timer does not know exist

This is where first-year files go wrong, because these forms carry penalties calculated without reference to whether any tax was due. A return showing zero US tax can still attract five-figure penalties for an unfiled information return.

FBAR — FinCEN Form 114

Filed with the Treasury rather than the IRS, and required where the aggregate maximum value of your foreign financial accounts exceeded $10,000 at any point in the calendar year. Aggregate is the operative word: ten accounts of £1,500 each cross the line. Accounts you hold jointly with a non-US spouse count in full, and so do accounts over which you merely hold signature authority, which routinely captures finance directors and founders with company bank mandates. UK pensions are generally reportable. If you want to see the exposure that accrues from silence, our FBAR penalty calculator sets out the arithmetic.

Form 8938 — Statement of Specified Foreign Financial Assets

Filed with the 1040 and covering a broader class of assets than the FBAR, at higher thresholds for those living abroad: more than $200,000 on the last day of the year or $300,000 at any time for a single filer, and $400,000 or $600,000 respectively for a joint filer. The IRS publishes a direct comparison of Form 8938 and FBAR requirements. The two forms overlap heavily but neither substitutes for the other, and most London-based professionals with a workplace pension and a couple of accounts will need both within a year or two.

Form 8621 — the ISA and unit trust problem

Almost every pooled UK investment — an OEIC, a unit trust, an investment trust, a UK-domiciled ETF — is a passive foreign investment company for US purposes. Holding one exposes you to the punitive excess distribution regime unless a qualified electing fund or mark-to-market election is available and made in time, and each holding is reported on its own Form 8621. A stocks and shares ISA, which the UK treats as entirely tax free, is for US purposes a taxable wrapper containing several of these. First-time filers arrive with these portfolios constantly, having been sold them by UK advisers with no visibility of the US side. Part of the first engagement is deciding what to keep, what to unwind, and in which tax year to do it.

Form 5471 — the UK limited company

Americans who contract in London frequently incorporate a UK limited company, either on advice or because an agency required it. That company is a controlled foreign corporation, and the shareholder files Form 5471 with a full set of US-basis financial statements attached, along with GILTI and subpart F computations. The compliance cost is material and is often disproportionate to the UK tax saved by incorporating. Modelling this before the company is formed is far cheaper than unwinding it afterwards.

Form 8858 — the UK sole trade or branch

A first-timer who does any freelance or consulting work in their own name, or who runs an unincorporated branch of a US business, is very often treated as holding a foreign disregarded entity for US purposes. That carries its own annual information return, prepared from accounts restated onto a US basis, and it is missed far more often than Form 5471 because no company was ever formed.

How double taxation is actually avoided

The US–UK treaty and the domestic credit rules mean that most Americans in London pay very little additional US tax, but the route matters. There are two main mechanisms and they are not interchangeable.

The foreign earned income exclusion removes a capped amount of earned income from the US return. It is simple, but it excludes income rather than crediting tax, so it leaves nothing to offset US tax on income above the cap, it does nothing for investment income, and it interacts badly with the child tax credit. The foreign tax credit instead credits UK tax paid against US tax on the same income. For a London earner paying UK tax at 40% or 45% against US rates that top out lower, the credit route usually eliminates the US liability entirely and generates carryforwards that shelter later income — including, in a good year, a bonus or an equity vest. For higher earners the credit is almost always the correct election, and the exclusion is a trap that looks attractive in year one and constrains you afterwards, since revoking it locks you out for five years absent IRS consent.

Three further points belong in a first-year conversation. UK National Insurance and US social security are dealt with under the totalisation agreement rather than the tax treaty, and a certificate of coverage prevents contributions to both systems. The 3.8% net investment income tax is asserted by the IRS to fall outside the foreign tax credit rules, which means an American in London with substantial investment income can face a genuine US charge despite paying UK tax at higher rates. And UK pension contributions and growth are addressed by the treaty's pension articles rather than by domestic US rules — a workplace pension or SIPP that the UK treats as tax-advantaged needs positive treaty positions taken on the US return, not silence.

What if you should have been filing already?

A significant proportion of first-time engagements are not first years at all. They are people who have been in London for three, five or fifteen years and have never filed a US return — including accidental Americans who were born in the US, left as infants, and hold citizenship they never exercised.

The remedy is generally the Streamlined Foreign Offshore Procedure, which for a taxpayer whose failure to file was non-wilful requires the three most recent delinquent returns, six years of FBARs, and a signed narrative certifying non-wilfulness. Where the conditions are met the penalty is nil. The critical points are that eligibility turns on the facts as they stand before the IRS contacts you, that the narrative is the substantive document in the submission rather than a formality, and that entering the programme incorrectly is worse than not entering it. Our IRS streamlined filing team handles these separately from routine first-year preparation, and the diagnosis of which route applies to you happens in the intake call, before any engagement letter is signed.

How a first year is priced and sequenced

First-year cross-border fees are higher than subsequent years, and any adviser who quotes you a single figure before seeing your facts is guessing. The drivers are the number of information returns, whether a PFIC portfolio needs analysing, whether a foreign corporation is in the picture, whether a state return survives, and whether prior years need remediation. A straightforward salaried employee with one pension and two bank accounts sits at one end; a founder with a UK limited company, an equity position vesting across two countries and eight years of unfiled returns sits at the other, and the difference is not marginal.

What you should expect is a fixed quote issued after intake and diagnostic work, with a defined scope, a stated position on what triggers additional fees, and a written sequence. A typical first year for an American who arrived in London during the 2025/26 UK tax year runs approximately as follows.

Stage	Timing	What happens
Intake and diagnostic	On engagement	Day counts, residence determination, account and asset inventory, prior-year exposure check
HMRC registration	By 5 October following the UK year end	Register for Self Assessment; UTR issued, which can take several weeks
UK return prepared	October to December	Split-year position, employment and foreign income, UK liability determined
UK return filed and paid	By 31 January	Balancing payment and any payment on account settled
US return prepared	February to May	Credit versus exclusion modelled using the final UK figure; treaty positions taken
US filing	By 15 June, or 15 October on extension	Form 1040 with Forms 1116, 8938 and any 8621 or 5471
FBAR	By 15 October	Filed separately with FinCEN, automatic extension applies
Year two planning	Following spring	Portfolio restructuring, pension elections, standing calendar handed over

What to ask before you engage

• Do you prepare both returns in-house, or do you subcontract one side? A file split between two firms is where treaty positions get lost.
• Who signs the US return, and are they an Enrolled Agent or CPA? Who signs the UK return, and are they chartered?
• How do you handle PFICs, and is 8621 preparation inside the quoted fee or outside it?
• What is your position on the foreign earned income exclusion versus the credit for someone at my income level, and can you show me the modelling?
• If I have prior unfiled years, do you assess streamlined eligibility before I commit to an engagement?
• What do you need from me, by when, to hit both deadlines without an extension?

The answers to those six questions separate a firm that prepares two returns from a firm that prepares one cross-border position expressed on two returns. Our US-UK tax accountants page sets out how we structure that work, and our guides library covers the individual mechanics in more depth.

Get the first year right

The first return you file sets the pattern for every year that follows: the elections you make, the residence position you assert, the credit carryforwards you build, and the portfolio you either fix now or explain for a decade. If you have arrived in London and are facing both systems for the first time — or have discovered that you have been facing them for years without knowing it — contact our cross-border team for a confidential consultation. We will establish your residence position, scope the returns you actually owe, and give you a fixed quote and a written sequence before you commit to anything.