To pay the IRS from the UK you have two routes that need no US bank account: an international wire in US dollars sent through your UK bank, or a card payment through one of the processors the IRS approves. The IRS Direct Pay service needs a US bank account, so a sterling account alone will not work with it. In a catch-up the payment is also part of the submission, because the Streamlined Foreign Offshore Procedures (opens the official IRS page in a new tab) ask for the tax and the interest to be paid with the package.
This post is for Americans in the UK who have worked out roughly what they owe and now need to move the money. It goes further on one step of our guide for people behind on US taxes in the UK. It covers the payment channels, the currency rule, the cost of converting pounds, how to calculate the balance, what to record, and a worked example from Bristol. We could not confirm every detail of the IRS wire process directly, so where that is so we say it and point you to the IRS instructions.
Can you pay the IRS from a UK bank account?
Yes, in two ways, but not by the route most people try first. A UK account cannot be used with IRS Direct Pay, which asks for a US bank routing number and does not accept international bank codes. The IRS does accept an international wire sent through a foreign bank, and card payments in US dollars through third-party processors.
The IRS publishes a flyer for international taxpayers that sets out the options side by side: a US bank account, an international wire, and a card through a processor. It also says payments must be in US dollars. The IRS guidance for taxpayers living abroad (opens the official IRS page in a new tab) is the place to start, and the payment instructions inside the Streamlined submission itself take precedence over any general advice.
For a catch-up payment the choice usually comes down to the size of the balance and how much a wire costs at your bank. The IRS itself warns that wiring from abroad can be costly and suggests considering a card first. A card has its own charges, so the comparison is worth making before the payment is sent and not after.
How does an international wire to the IRS work?
You complete a worksheet from the IRS, the Same-Day Taxpayer Payment Worksheet, and take it to your bank. It carries the IRS bank details, a tax type code and the tax period. Your bank then sends a US dollar wire, which it must be able to route through a US bank. Your bank may charge a fee for the service.
The tax type code and the tax period are what let the IRS apply the money to the right year. A wire that arrives without them is harder to match. In a Streamlined package, where three years of returns arrive together, we confirm the code and the period for each year before any money moves, and we do not guess them. The IRS lists its codes on its page for foreign electronic payments.
Wires are not instant in practice. The IRS advises allowing extra time, and a cross-border payment can take longer to post than a domestic one. Because the submission is a package, we prefer the money to be on its way before the package is sent, so that the payment can be traced to the account when the returns are processed.
- Ask your bank for its fee and the exchange rate before agreeing
- Fill in the IRS worksheet with the correct tax type code and period
- Quote your taxpayer identification number wherever the bank allows a reference
- Keep the bank's confirmation of the transfer with your records
Must the payment be in US dollars?
Yes. IRS guidance says that, generally, only US currency is acceptable for payment of income tax. A sterling cheque will not do. Your bank or card issuer converts pounds into dollars, and you bear the cost of that conversion on top of the tax.
The exchange rate that matters for the payment is the one your bank gives you on the day, which is not the rate used to translate income on the return. The IRS says its yearly average exchange rates (opens the official IRS page in a new tab) are for reporting and are not used when paying US tax. The IRS page on foreign currency and exchange rates (opens the official IRS page in a new tab) explains which rate belongs where.
The practical effect is that the sterling cost of a dollar balance can move between the day you calculate it and the day you pay it. Bank margins on currency conversion also differ. Comparing the all-in sterling cost from two routes is more useful than comparing the headline fee, and a quote taken on the day is the figure to rely on.
Can you pay the IRS by credit or debit card from the UK?
Usually yes, through a third-party processor and not directly with the IRS. The IRS says a card issued by a foreign bank can be used where the card brand is one the processors accept. Fees and currency conversion charges may apply, and the processor sets them, so they should be checked before confirming.
A card can be the easier channel for a modest balance because there is no worksheet and no bank branch. It can also leave a clear receipt. The drawbacks are the processor's fee and, with some cards, a foreign transaction charge from the issuer. We have not verified how every UK card behaves, so a small test of the issuer's terms is sensible.
Check, too, whether a card can carry the type of payment you are making. The payment screens ask which return and which year the money is for, and a late payment with a Streamlined package is not a routine annual payment. If the options on screen do not fit, the wire route with a specified tax type code and period may match the account more safely.
How much do you actually have to pay?
The submission asks for payment of all the tax shown on the returns plus statutory interest on each late payment. The Foreign route charges no miscellaneous offshore penalty to a taxpayer who qualifies and certifies truthfully. The Domestic route charges 5% on the relevant foreign assets, so a UK resident on the Foreign route pays tax and interest only.
The returns cover three years and the FBARs six years. The tax on each return is usually small for a UK resident, because the foreign tax credit often absorbs it, and that is a reason to complete the returns first and pay afterwards. The balance depends on the credit position, the income type and the filing status, so it is a figure to calculate and not to estimate. The Form 1040 page covers the return itself.
The IRS warns that a miscalculation can produce a balance due notice or a refund. A shortfall is therefore not fatal, but it is untidy. Where cash is short, the IRS offers payment plans (opens the official IRS page in a new tab) for tax debts in general. The Streamlined instructions ask for full payment with the submission, so we raise a plan with you before filing and do not leave it until after.
What records should you keep once the money has gone?
Keep the bank's transfer confirmation, the completed IRS worksheet if you used a wire, the card receipt if you paid by card, and the calculation of tax and interest for each year. These show what was paid, when, and for which year. They are the evidence if the IRS later queries a balance.
The IRS does not usually send an acceptance letter for a Streamlined submission, so the payment record is among the few things that proves it was made. Our post on what happens after a Streamlined submission explains how the process ends. The certification lists the amounts owed for each year, including interest, so the figures on the form and the money sent should agree.
FBARs are separate. They are filed electronically with FinCEN and carry no payment, so the FBAR filing page is where that step is described. Paying the tax does not file an FBAR and filing an FBAR does not pay tax.
- Bank or card confirmation showing date, amount and destination
- The IRS worksheet and the tax type code used, if you wired
- The tax and interest calculation for each of the years
- A copy of the signed Form 14653 certification
How might this work for a US citizen in Bristol?
A US citizen employed in Bristol has no US bank account, only sterling accounts, and meets the conditions for the Foreign route. The returns for the three years show a small balance in one year after the foreign tax credit, and the interest is added to it.
She cannot use Direct Pay, so she compares a wire with a card. Her bank quotes a transfer fee and an exchange rate, and the card processor shows its own charge. She chooses the cheaper in sterling terms on the day, completes the IRS worksheet with the right code and period if she wires, and keeps the confirmation with the signed certification.
Because the payment goes with the package, she also checks that the figure on the certification matches the money sent. Our IRS streamlined filing service prepares the returns and the payment figures together, and the foreign income and FBAR service covers the FBARs. For ongoing years, the individual tax returns page explains how filing continues. Our guide to IRS streamlined filing from the UK shows the whole sequence, and you can contact US UK Tax Returns to talk it through.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
