# UK tax return for US expat



## mgotlib (Dec 29, 2009)

Hi, 
Can someone please recommend a person or a company to do my UK tax return, due by 31 Jan, and preferrably one that doesn't charge and arm and a leg?
I've been "dropped" by my company who used to pay for my tax returns and now have to find someone myself, but really don't want to have to pay £750-£1000 for a simple tax return!

Thanks in advance.

Marianna


----------



## Punktlich2 (Apr 30, 2009)

mgotlib said:


> Hi,
> Can someone please recommend a person or a company to do my UK tax return, due by 31 Jan, and preferrably one that doesn't charge and arm and a leg?
> I've been "dropped" by my company who used to pay for my tax returns and now have to find someone myself, but really don't want to have to pay £750-£1000 for a simple tax return!
> 
> ...


You really can do your own return online or with commercial software. You say it's "simple" which suggests your tax is completely covered by PAYE. I assume you already have registered for online tax. https://online.hmrc.gov.uk/login

If you have tax treaty issues try to copy what your tax preparer did for you last year.

I am amazed that anyone charges £750-£1000 for a simple tax return. A tax preparer who works from home would more likely charge a few hundred pounds, max.


----------



## ktz (Jul 20, 2010)

Punktlich2 said:


> You really can do your own return online or with commercial software. You say it's "simple" which suggests your tax is completely covered by PAYE. I assume you already have registered for online tax.
> 
> If you have tax treaty issues try to copy what your tax preparer did for you last year.
> 
> I am amazed that anyone charges £750-£1000 for a simple tax return. A tax preparer who works from home would more likely charge a few hundred pounds, max.


Hi Punktlich, first off, thanks for all the great tax advise on the forum - i have read quite a few posts of yours and all have been helpful. In one of the other posts and in this one, you mentioned ex-IRS employees or other IRS knowledgable UK based accountants (or perhaps even yourself?) that might be able to help out with individual tax returns for us lost in the UK without a clue?

My books are complete, but Im now quite late filing because I am having a tough time finding someone reasonably priced to help me file (a short consultation would be great as well). I got in touch with a company called 1st contact, but they were quoting around £108/month for ongoing services. I'm just an individual and my business isn't big enough to require services like that just yet. 

If you have any recommendations at all, they would be a great help. Right now Im pretty much without a lead after a few days of hunting. If you prefer not to post on the forum, feel free to mail me as well - bidnezz at gmail

Thanks in advance!


----------



## Bevdeforges (Nov 16, 2007)

ktz said:


> Hi Punktlich, first off, thanks for all the great tax advise on the forum - i have read quite a few posts of yours and all have been helpful. In one of the other posts and in this one, you mentioned ex-IRS employees or other IRS knowledgable UK based accountants (or perhaps even yourself?) that might be able to help out with individual tax returns for us lost in the UK without a clue?
> 
> My books are complete, but Im now quite late filing because I am having a tough time finding someone reasonably priced to help me file (a short consultation would be great as well). I got in touch with a company called 1st contact, but they were quoting around £108/month for ongoing services. I'm just an individual and my business isn't big enough to require services like that just yet.
> 
> ...


Take a look at the website for the National Association of Enrolled Agents NAEA : What is an Enrolled Agent? This is an association for US Enrolled Agents, which are tax advisors certified by the US IRS. If you do a search (click on "Find an Enrolled Agent" on the left side of the home page, you can find a number of EAs located in the UK. I believe these are local tax and/or accounting folks who should be able to help you filing both your UK and US taxes. EAs are normally quite a bit less expensive than CPAs or tax attorneys (at least in the US). 

In any event, it can't hurt to ask.
Cheers,
Bev


----------



## ktz (Jul 20, 2010)

Bevdeforges said:


> Take a look at the website for the National Association of Enrolled Agents. This is an association for US Enrolled Agents, which are tax advisors certified by the US IRS. If you do a search (click on "Find an Enrolled Agent" on the left side of the home page, you can find a number of EAs located in the UK. I believe these are local tax and/or accounting folks who should be able to help you filing both your UK and US taxes. EAs are normally quite a bit less expensive than CPAs or tax attorneys (at least in the US).
> 
> In any event, it can't hurt to ask.
> Cheers,
> Bev


Thanks so much for the lead Bev. I called every agent listed in the UK today and haven't had much luck (still waiting to hear back from a couple). Most prices range from £400-£750 to just file the returns, with quotes of £350-£400 an hour for consultation. Being a full time student at the moment, it seems like any savings benefits I might get would be offset (and probably then some) by the costs of having someone help.

Do you think there are any other more reasonable people out there or is this kind of the going rate?

Best,
Joel


----------



## Bevdeforges (Nov 16, 2007)

Are you looking for someone to do both your UK and US tax returns, or just the US ones? Because unless you've got the money to have complications, the US returns are actually pretty easy to do yourself.
Cheers,
Bev


----------



## ktz (Jul 20, 2010)

Initially, I was looking for someone to do both (as it would just be easier that way), but it seems those people are so scarce that they charge a super-premium. I definitely don't make enough to warrant hiring anyone at the prices Im seeing, but it would still be great to find someone who could help me with the UK returns at least (that knows US tax law and knows about the tax treaties). 

Im a little scared to do it myself in fear i may miss something extremely important (like the overseas account reporting) that will end up costing me an arm. It's a bit difficult on both the US and UK sides as Im self employed - it seems that makes things quite confusing.

So far the best quote I have gotten for the US return has been £400 (the people in the states used to do the same for $250 :/). The cheapest I have found for the UK is £350-£450 (all before VAT).

The first estimate I got was for a contractual, month-to-month management type service, whom i thought was going to be on the high-end at £110 a month, but considering the other quotes I've gotten now for just filing, it seems like they might actually be pretty average.


----------



## Bevdeforges (Nov 16, 2007)

Check with the IRS office at the London Embassy. They often know of VITA (Volunteers in Tax Assistance) programs within the various US expat groups, where you can get help with your taxes for free. There's also the fact that the overseas IRS staff is generally way more helpful and easy to deal with than the ones back home.

Or ask around amongst some of the American expat organizations yourself. They often have members who might be interested in doing some tax work - or they know of tax preparers in the area.
Cheers,
Bev


----------



## ktz (Jul 20, 2010)

Bevdeforges said:


> Check with the IRS office at the London Embassy. They often know of VITA (Volunteers in Tax Assistance) programs within the various US expat groups, where you can get help with your taxes for free. There's also the fact that the overseas IRS staff is generally way more helpful and easy to deal with than the ones back home.
> 
> Or ask around amongst some of the American expat organizations yourself. They often have members who might be interested in doing some tax work - or they know of tax preparers in the area.
> Cheers,
> Bev



Thanks Bev! I will try and do some more digging. Its good to know that the IRS agents here are easier to deal with than the ones back home....I wouldn't even considered that one an option! I have seen a couple expat groups online, but all seem to charge quite a bit for a membership (with all the rest of the mounting bills...it wasn't something I was so keen on). Do you know any good, free expat groups by chance?

Best,
Joel


----------



## Bevdeforges (Nov 16, 2007)

I don't think there ARE any free expat groups - especially amongst the Americans. (marketplace economy and all that good stuff)

There are two "international" US expat groups that do quite a bit on the tax issue - though they're certainly not free either: AARO and ACA The ACA site even has some tax guidance available. 
Cheers,
Bev


----------



## ktz (Jul 20, 2010)

Bevdeforges said:


> I don't think there ARE any free expat groups - especially amongst the Americans. (marketplace economy and all that good stuff)
> 
> There are two "international" US expat groups that do quite a bit on the tax issue - though they're certainly not free either: AARO and ACA The ACA site even has some tax guidance available.
> Cheers,
> Bev


Hi Bev,
Still trying to sort out all this stuff...sadly :/ I visited the embassy and you were right, very nice and easy to deal with in there (albeit incredibly fast...and a tad confusing for me). Since then I have been trying to sort out all these forms on my own - so far Ive got my 1040, Schedule C, Schedule M, form 1116, and Schedule SE.

Is it correct that everyone living abroad and is working for themselves still needs to pay SE tax as if they were living in the US (ie, without any foreign tax credits applied)? I was reading about it and it was talking about the funding of Social Security and Medicare, which seems strange if I am having to pay NI contributions here in the UK and will likely be hit with some form of social security and self employment tax here as well.

I read a bit further and noticed that I am eligible to apply for exemption from one system or the other, but Im not sure what effect that has on my self employment tax in the end (or where to find that out :?). Also, do you know if we have a choice as to which system we opt out of? I dont know which is the "better deal" just yet, but as I am planning on staying in the UK for some time longer, I may decide to opt into their system to make things a little easier on myself.

Do you have any advice on this by chance?

Thanks again for all the help, it is much appreciated.

Joel


----------



## Bevdeforges (Nov 16, 2007)

ktz said:


> Hi Bev,
> Still trying to sort out all this stuff...sadly :/ I visited the embassy and you were right, very nice and easy to deal with in there (albeit incredibly fast...and a tad confusing for me). Since then I have been trying to sort out all these forms on my own - so far Ive got my 1040, Schedule C, Schedule M, form 1116, and Schedule SE.


Shouldn't you also have a 2555 (Overseas Earned Income Exclusion) form in there someplace?



> Is it correct that everyone living abroad and is working for themselves still needs to pay SE tax as if they were living in the US (ie, without any foreign tax credits applied)? I was reading about it and it was talking about the funding of Social Security and Medicare, which seems strange if I am having to pay NI contributions here in the UK and will likely be hit with some form of social security and self employment tax here as well.


Not really correct. If you're paying the UK social insurances, you shouldn't get hit up for the US social security at the same time. It depends a bit on how your business in the UK is set up and what taxes you're paying in the UK on your business.

Can't speak for the UK business forms, but here in France, my husband and I have a company and could be said to be "self-employed" however, because of the legal form of the company, for US tax purposes I am the employee of the company. I report my salary to the IRS, but then exclude it on form 2555. 



> I read a bit further and noticed that I am eligible to apply for exemption from one system or the other, but Im not sure what effect that has on my self employment tax in the end (or where to find that out :?). Also, do you know if we have a choice as to which system we opt out of? I dont know which is the "better deal" just yet, but as I am planning on staying in the UK for some time longer, I may decide to opt into their system to make things a little easier on myself.


You mentioned in your initial post that you had been "dropped" by the accountant who used to do your returns. You should have copies of what they filed in previous years to see how they handled the self-employment tax in the past. If they were paying both to the UK and the US all this time, you could be very fortunate that they dropped you. 

But even for tax professionals, most tax forms are filled out by following what was done the previous year. 
Cheers,
Bev


----------



## ktz (Jul 20, 2010)

Bevdeforges said:


> Shouldn't you also have a 2555 (Overseas Earned Income Exclusion) form in there someplace?


The IRS actually told me explicitly not to fill in that form as he figured (and was right) that I didnt make enough money this year for it to really matter. that being the case, I was able to fill in a Schedule M and claim $400 (which he also told me about). We will see if it stay that way when I head in this week!




> Not really correct. If you're paying the UK social insurances, you shouldn't get hit up for the US social security at the same time. It depends a bit on how your business in the UK is set up and what taxes you're paying in the UK on your business.
> 
> Can't speak for the UK business forms, but here in France, my husband and I have a company and could be said to be "self-employed" however, because of the legal form of the company, for US tax purposes I am the employee of the company. I report my salary to the IRS, but then exclude it on form 2555.


Im just a sole trader here in the UK, but have been paying (and now owe more) class 4 NIC's (for their social heathcare). It is my understanding that the Self Employment tax in the US goes for Social Security and Medicare, so it would seem like it is a bit different than NICs here, so maybe that is their justification as to why I have to pay it? I will let you know what happens when I go in next week!



> You mentioned in your initial post that you had been "dropped" by the accountant who used to do your returns. You should have copies of what they filed in previous years to see how they handled the self-employment tax in the past. If they were paying both to the UK and the US all this time, you could be very fortunate that they dropped you.


Hah! - very true. Strangely enough, my old accountant didnt have me paying SE tax in the US at all (he didnt really give me an explanation for anything he did...I just trusted him on it as he used to work for the IRS).

Best,
Joel


----------



## Bevdeforges (Nov 16, 2007)

ktz said:


> Im just a sole trader here in the UK, but have been paying (and now owe more) class 4 NIC's (for their social heathcare). It is my understanding that the Self Employment tax in the US goes for Social Security and Medicare, so it would seem like it is a bit different than NICs here, so maybe that is their justification as to why I have to pay it? I will let you know what happens when I go in next week!


UK national insurance IS "social security" - retirement and health care primarily. Since the US has no national health care system, US social security is only retirement. But I tend to agree with your old tax advisor - you shouldn't be paying both UK national insurances and US self-employment tax unless you are planning to return to the US on retirement and wish to maintain your participation in the US system. If you stay in the UK, that medicare is absolutely worthless to you.
Cheers,
Bev


----------

