Introduction The United States is one of only two countries in the world that taxes its citizens based on nationality rather than residence. The other is Eritrea. This means that every American living abroad — including the estimated 350,000 US citizens living in the United Kingdom — has a US tax filing obligation. Every year. […]
The United States is one of only two countries in the world that taxes its citizens based on nationality rather than residence. The other is Eritrea.
This means that every American living abroad — including the estimated 350,000 US citizens living in the United Kingdom — has a US tax filing obligation. Every year. Regardless of whether they owe any US tax. Regardless of whether they have filed a UK return.
Most of them do not know this. And the ones who do know often delay acting because the process feels overwhelming. It does not have to be.
Specialist US expat tax services exist precisely for this situation. They guide Americans abroad through the process of safely and efficiently catching up on late filings with the minimum possible penalty exposure. This guide explains exactly how that process works in 2026. Contact Jungle Tax at https://www.jungletax.co.uk/ for specialist guidance.
US expat tax services are specialist tax advisory and compliance services delivered to US citizens and permanent residents living outside the United States.
These services cover the full range of US federal filing obligations that apply to Americans abroad. This includes the annual federal income tax return (Form 1040), the Foreign Bank Account Report (FinCEN Form 114), the FATCA foreign asset disclosure (Form 8938), and any other information returns required by the client’s specific circumstances.
For Americans living in the UK, US expat tax services also cover interactions between US filing and the UK self-assessment return — including the foreign tax credit, which prevents double taxation on the same income.
The IRS overview of tax obligations for US citizens and resident aliens abroad is published at:
https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad
The vast majority of Americans who move abroad do not intend to evade taxes. They simply do not know that the US filing obligation follows them.
The United States uses citizenship-based taxation. This means a US citizen who moves to the UK, pays UK income tax in full, and has no US income still has a US federal filing obligation. Most countries do not work this way. Most Americans are never told that theirs does.
By the time most expats discover the obligation, they are already several years behind. The good news is that there is a planned way to catch up.
This guide is written for US citizens and permanent residents living in the United Kingdom who have not filed US tax returns for one or more years.
It is also relevant to dual nationals who have lived in the UK their entire lives but hold US citizenship through a parent. And it applies to Americans who have received a letter from the IRS about unfiled returns and are unsure what to do next.
The Foreign Account Tax Compliance Act has fundamentally changed offshore tax compliance. Since 2014, UK banks and financial institutions have been reporting account information for US persons directly to HMRC. HMRC passes that data to the IRS under the US-UK Intergovernmental Agreement.
A US citizen living in the UK with an unreported current account, savings account, or ISA is not invisible to the IRS. The account data is already in the system. What is missing is the US return that should have been filed alongside it.
Acting through US expat tax services now — before the IRS initiates contact — is always safer and less costly than waiting.
The IRS Streamlined Filing Compliance Procedures offer a penalty-reduced route back to compliance for non-wilful non-filers. But this route closes the moment the IRS initiates contact about the delinquency.
Once an IRS examination or formal inquiry begins, the Streamlined program is no longer available. The full range of civil penalties — including FBAR penalties of up to $10,000 per account per year for non-wilful violations — can then be asserted.
Specialist US expat tax services help clients act before this window closes. Our related guide on IRS Streamlined Filing Compliance explains the program in full detail.
The possible FBAR penalty exposure increases by one year for each year of noncompliance. Every year of unreported investment income from a UK ISA adds another year of US tax, interest, and potential penalties.
The total cost of catching up after five years of non-compliance is not five times the cost of one year. Interest compounds. Penalty exposure accumulates. Acting early consistently produces a lower total cost than acting late.
Every US citizen must file Form 1040 annually, regardless of where they live. For most Americans in the UK, the return includes UK employment income, rental income, investment income, and any other worldwide sources of income.
Two key reliefs reduce or eliminate the US tax liability for most UK-based Americans.
The Foreign Earned Income Exclusion (Form 2555) allows qualifying individuals to exclude up to $126,500 of foreign earned income in 2024 from US taxation. The foreign tax credit (Form 1116) allows UK income tax already paid to offset the remaining US liability on the same income.
For most Americans working in the UK and paying UK income tax in full, the combination of these two reliefs reduces the net US tax liability to zero or close to it.
FinCEN Form 114 must be filed annually by any US person who has a financial interest in or signatory authority over foreign financial accounts with an aggregate balance exceeding $10,000 at any point during the calendar year.
For an American living in the UK, reportable accounts typically include: personal current and savings accounts; ISAs (which are not recognized as tax-exempt by the IRS); joint accounts with a non-US spouse; employer pension accounts; and any business accounts held personally.
The FBAR is filed electronically through the FinCEN BSA E-Filing System. The deadline is 15 April with an automatic extension to 15 October. Specialist US expat tax services file the FBAR as part of the annual compliance package.
Form 8938 is filed with the annual tax return and covers specified foreign financial assets. The filing threshold for single filers living outside the United States is $200,000 at year-end, or $300,000 at any point during the year.
For Americans in the UK who hold investment portfolios, pension funds, or other significant financial assets, Form 8938 is often required alongside the FBAR. The two forms are not interchangeable. Both may be required simultaneously.
Catching up on late US filings through the Streamlined Foreign Offshore Procedures is a defined process. Every step matters.
Step one — Eligibility assessment.
The adviser confirms that you meet the non-residency requirement for the foreign track. You must not have been present in the United States for 330 or more days in at least one of the three most recent tax years. The adviser also confirms that your non-compliance was non-wilful — meaning it arose from negligence, inadvertence, or a genuine misunderstanding of the law.
Step two — Income and account history reconstruction.
The adviser identifies all income received during the relevant period — UK employment income, rental income, investment income, pension income, and any other sources. All foreign financial accounts are identified for FBAR purposes, including their highest annual balances.
Step three — Preparation of three years of US federal tax returns.
The three most recent years of delinquent or amended returns are prepared. The Foreign Earned Income Exclusion and the foreign tax credit are applied to minimize the net US tax liability. All required information returns — including Form 8938 where applicable — are included.
Step four — Preparation of six years of FBAR filings.
FinCEN Form 114 is prepared for the six most recent years for which the deadline has passed. The highest annual balance in each reportable foreign financial account is established and reported. FBARs are submitted electronically through the BSA E-Filing System at:
https://bsaefiling.fincen.treas.gov/main.html
Step five — Drafting the non-wilfulness certification.
Form 14653 requires a signed certification under penalty of perjury that the non-compliance was non-wilful. It also requires a detailed narrative explaining the specific circumstances of the non-compliance. The narrative must be honest, specific, and well-supported. A vague narrative provides little protection if the IRS later questions the submission.
Step six — Calculating and paying the tax and interest owed.
Under the Streamlined Foreign Offshore Procedures, no miscellaneous offshore penalty applies. The payment consists of the additional US tax on any previously unreported income, plus statutory interest from the original due date of each return.
Step seven — Submission and transition to ongoing compliance.
The complete package — returns, FBARs, Form 14653, and payment — is submitted to the IRS. The adviser then establishes an ongoing annual filing program covering both the UK self-assessment and the US federal return.
The HMRC guidance on tax obligations for UK residents with foreign income is published at:
https://www.gov.uk/tax-foreign-income
Amy is a US citizen from Ohio. She moved to Scotland at the age of twenty-six to work as a nurse.
She has lived in Edinburgh for nine years. She pays UK income tax through PAYE. She has a UK current account, a cash ISA, and a small Stocks and Shares ISA.
Amy had no idea she needed to file US tax returns. She discovered the obligation when a colleague mentioned it at work.
She approached Jungle Tax in a state of anxiety. She was worried she owed thousands of dollars in back taxes and penalties.
The review confirmed the following.
First, Amy’s UK nursing salary was below the Foreign Earned Income Exclusion threshold for most of the relevant years. She owed no US income tax on her employment income.
Second, her Stocks and Shares ISA had generated modest investment income each year — dividends and small gains. This income was not taxable in the UK when held within the ISA wrapper. But it was taxable in the United States. The total additional US tax over three years was approximately $840.
Third, all three accounts — her current account, her cash ISA, and her Stocks and Shares ISA — were reportable foreign financial accounts for FBAR purposes. The aggregate balance had exceeded $10,000 in every year.
Fourth, Amy’s Stocks and Shares ISA exceeded the Form 8938 reporting threshold in two of the three relevant years.
A Streamlined Foreign Offshore Procedures submission was prepared.
Three years of US federal returns were filed, including the ISA investment income. Six years of FBARs were filed for all three accounts. Form 8938 was included for the two relevant years.
The total additional US tax and interest across the three years came to approximately $1,120. No miscellaneous offshore penalty applied.
Amy now files annual US returns as part of an ongoing engagement. She does so knowing her position is fully under control. Contact our US expat tax services team at hello@jungletax.co.uk or 0333-8807974 if you are in a similar position.
The Streamlined program is available only before the IRS initiates contact regarding the delinquency.
Many Americans in the UK know they are behind, but delay because nothing has happened yet. This is the most dangerous approach. FBAR exposure accumulates every year. And the Streamlined window can close at any time — with no warning.
A Streamlined submission must include both three years of tax returns and six years of FBAR filings. Filing the returns alone does not complete the program.
The FBAR exposure remains entirely unresolved if the FBARs are omitted. The Streamlined penalty protection does not extend to accounts not included in the FBAR filing. The full IRS Streamlined requirements are published at:
https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures
Many late filers assume they owe large amounts of US tax on their UK salary. In most cases, this is not true.
The Foreign Earned Income Exclusion allows qualifying Americans abroad to exclude up to $126,500 of foreign-earned income from US taxation in 2024. For most Americans working in the UK, this exclusion reduces the taxable US income to zero. The exclusion must be claimed on Form 2555 — it does not apply automatically.
The non-wilfulness certification on Form 14653 is a sworn statement reviewed by an IRS examiner.
A narrative that simply says ‘I did not know I had to file’ provides very little protection. A well-drafted narrative explains the specific circumstances — the move abroad, the misunderstanding of citizenship-based taxation, and the diligent UK tax-filing history. Getting this right is one of the most important things specialist US expat tax services do for clients.
A UK Individual Savings Account is not recognized as tax-exempt by the IRS. Income generated inside an ISA — dividends, interest, and gains — must be reported on the US federal return.
Additionally, a Cash ISA or Stocks and Shares ISA is a reportable foreign financial account for FBAR purposes. Many Americans in the UK are completely unaware of this. Missing ISA accounts on the FBAR create additional penalty exposure that the Streamlined program does not automatically resolve.
Jungle Tax is a specialist US-UK cross-border tax advisory firm. Our team includes IRS Enrolled Agents and UK-qualified tax practitioners with specific experience in delivering US expat tax services for Americans living in the United Kingdom.
We have guided many Americans through the Streamlined Foreign Offshore Procedures. We begin every engagement with a clear eligibility assessment. We then prepare the returns, draft the non-wilfulness narrative, coordinate the FBAR filings, and claim every available relief — the Foreign Earned Income Exclusion, the foreign tax credit, and any other applicable deductions.
In the majority of cases, the additional US tax owed after reliefs is modest. Most Americans in the UK who catch up through our service find that years of anxiety were disproportionate to the actual cost of compliance.
You can find further information on our page at https://www.jungletax.co.uk/, or read our detailed guide to the Streamlined Foreign Filing Offshore Procedures.
If you are an American living in the UK who has not been filing US returns, contact our US expat tax services team at hello@jungletax.co.uk or call 0333-8807974 today.
For Americans living in the UK who have not been filing US tax returns, the path back to compliance is clear and well-defined.
Specialist US expat tax services guide you through the Streamlined Foreign Offshore Procedures — a structured, penalty-reduced route that most non-wilful non-filers can use to correct years of late filings safely.
Three points from this guide matter most.
First, the Streamlined program ends the moment the IRS initiates contact regarding the delinquency. Acting now is always better than waiting.
Second, UK ISAs are not invisible to the IRS. They must be reported on the FBAR, and the income inside them must be declared on the US federal return.
Third, the Foreign Earned Income Exclusion and the foreign tax credit typically reduce the net US tax liability for UK-based Americans to a modest amount — far less than most people fear.
Speak to a Jungle Tax adviser today — contact us at hello@jungletax.co.uk or visit https://www.jungletax.co.uk/ to learn more.
Yes. The United States uses citizenship-based taxation. This means every US citizen must file a federal tax return annually, regardless of where they live or where their income is earned. Paying UK income tax in full does not satisfy the US filing obligation. However, the Foreign Earned Income Exclusion and the foreign tax credit mean that most Americans living and working in the UK owe little or no US tax, but the return must still be filed. Specialist US expat tax services manage this filing as part of an integrated annual program.
The Streamlined Foreign Offshore Procedures is an IRS voluntary compliance program for US taxpayers who live outside the United States and have failed to file required returns due to non-wilful non-compliance. To qualify, you must not have been present in the United States for 330 or more days in at least one of the three most recent tax years, and your failure to file must have been due to negligence, inadvertence, or a genuine misunderstanding of the law. Under the foreign track, you file three years of returns and six years of FBARs and pay any tax and interest owed — but no miscellaneous offshore penalty. The program is available only before the IRS initiates contact regarding the delinquency.
Yes. A UK ISA is not recognized as a tax-exempt account by the IRS. Income generated inside a Cash ISA or Stocks and Shares ISA — dividends, interest, and capital gains — must be reported on the US federal return, even though it is tax-free in the UK. Additionally, both types of ISA are reportable foreign financial accounts for FBAR purposes if the aggregate balance of all foreign accounts exceeded $10,000 at any point during the year. Missing ISA accounts in the FBAR filing create penalty exposure that the Streamlined program does not automatically eliminate. Specialist US expat tax services identify and report all ISA accounts as part of the catch-up submission.
In most cases, very little or nothing. The Foreign Earned Income Exclusion allows qualifying Americans abroad to exclude up to $126,500 of foreign earned income in 2024 from US taxation. The foreign tax credit allows UK income tax already paid to offset any remaining US tax liability on the same income. For most Americans in the UK who pay UK income tax at the standard or higher rate, these two reliefs together reduce the net US tax liability on employment income to zero. A residual liability may arise on investment income — from ISAs, offshore bonds, or other accounts — but it is typically modest.
You should take specialist advice immediately. Once the IRS has initiated contact about a specific delinquency, the Streamlined Filing Compliance Procedures are no longer available for that matter. Other routes may still be available — including the IRS Voluntary Disclosure Practice or simply filing the outstanding returns with an explanation. The best course of action depends on the specific facts, including the nature of the IRS communication, the years involved, and the reason for the non-compliance. Do not ignore the correspondence — responding promptly almost always produces a better outcome than delay.
Yes. Having filed UK returns correctly throughout supports — rather than undermines — the non-wilfulness argument for the Streamlined program. It demonstrates that you have not been attempting to conceal income generally, but rather genuinely misunderstood the scope of your US filing obligation. The IRS is generally receptive to submissions from taxpayers who have been fully compliant in their country of residence and who can point to a clear and understandable reason for the US non-compliance. Specialist US expat tax services confirm the specific non-wilfulness argument applicable to your situation before any submission is made.
