An American whose only income is a UK salary taxed in full under PAYE usually has no Self Assessment return to file. The position changes once there is income that HMRC has not taxed at source, and for a US citizen that often means a brokerage account, a savings account or a let property left behind in the United States. Our guide to US and UK tax returns for Americans in the UK gives the outline. This article takes the question further.
It is written for US citizens and green card holders who are employed in the UK and have never been asked by HMRC for a return. It covers when PAYE is enough, the triggers that bring a return, the foreign and residence pages, registration and deadlines, how the UK return feeds the US foreign tax credit, and what to do if a return was due and never sent.
When is PAYE enough for an American working in the UK
PAYE is enough when the salary is the whole story. If an employer deducts the right tax through payroll and there is no other income, no taxable gain and no claim to make, HMRC does not generally expect a return. US citizenship does not change that UK rule.
A high salary no longer brings a return by itself. HMRC used to require a return from employees whose income passed a fixed level, even where all of it was taxed through payroll. That requirement was removed from the 2024/25 tax year. A well-paid employee is now drawn into Self Assessment by something else, such as a High Income Child Benefit Charge that is not collected through payroll, or by one of the triggers described below.
The HMRC tool to check if you need to send a Self Assessment tax return (opens the official GOV.UK page in a new tab) asks the questions in order and is worth running each year, because the answer follows the facts of that year. None of this touches the US side. The IRS still expects Form 1040 from a US citizen whose UK tax was settled entirely by payroll, since the foreign tax credit that removes the US liability is claimed on the US return itself.
What triggers a Self Assessment return for a US citizen
A return is generally triggered by income or gains that payroll has not taxed, or by a claim that can only be made on a return. UK residents are taxed on worldwide income, so US-source income counts in the same way as UK income, even where the US has already taxed it.
HMRC's guidance on tax on foreign income (opens the official GOV.UK page in a new tab) says a UK resident with foreign income or gains usually needs to complete a return. There is a narrow exception for a person whose only foreign income is dividends, whose total dividends from all countries sit within the UK dividend allowance, and who has nothing else to report. Many Americans with a US brokerage account hold more than that exception allows.
Small amounts of untaxed UK income can sometimes be collected by adjusting a tax code, which avoids a return. Foreign income rarely fits that route, because relief for the US tax already paid has to be calculated and claimed on the foreign pages, and HMRC has no payroll record to work from. The usual triggers for an employed American are these.
- US dividends, fund distributions or interest paid without UK tax deducted
- Rent from a property in the US or the UK
- Capital gains on which UK tax is due, including gains on US shares measured in sterling
- Self-employment or freelance income above the small trading allowance
- A claim to foreign tax credit relief, split-year treatment, the foreign income and gains regime or the treaty
- A notice to file from HMRC, which must be answered even if no tax is due
Which pages does the UK return need for US income
The main return is the SA100, with supplementary pages for each kind of income or claim. US income and the credit for US tax go on the SA106 foreign pages. Residence, split-year and treaty claims go on the SA109 pages, which HMRC's own free online service cannot file.
The SA106 foreign pages (opens the official HMRC page in a new tab) report overseas dividends, interest, rent and gains in sterling, and carry the claim for relief when income is taxed twice (opens the official GOV.UK page in a new tab). The credit is limited. For dividends from US companies, the treaty generally caps the US charge on a UK resident at 15%, and HMRC gives credit only up to that level. If a US broker has withheld more, the excess is not credited in the UK and has to be recovered on the US side.
The SA109 pages (opens the official HMRC page in a new tab) are needed in the year of arrival or departure if split-year treatment applies, for a claim under the foreign income and gains regime, and for certain treaty claims. Because HMRC's free online service does not include them, the return goes in through commercial software or on paper. That choice matters for timing, since a paper return is due three months before an online one. Our form guides to the SA100 and SA109 explain each set of pages, and our UK Self Assessment service prepares them.
When to register for Self Assessment and when the return is due
A person who has not filed before must tell HMRC by 5 October after the end of the tax year in which the income arose. The return is then due by 31 October on paper or 31 January online, and any tax is payable by 31 January.
The UK tax year runs from 6 April to 5 April, so income received in the year to 5 April is registered for by the following 5 October. Registration produces a Unique Taxpayer Reference, which arrives by post and can take some weeks. The Self Assessment deadlines (opens the official GOV.UK page in a new tab) also allow tax owed to be collected through the following year's tax code in some cases, provided the online return is filed by late December and the amount is within HMRC's limit.
Someone who registers after 5 October is given a filing date three months from the date of HMRC's notice, but the payment date does not move. Where the bill is large enough and little of the tax is collected at source, HMRC also asks for payments on account towards the next year, with the second due on 31 July. Our article setting out US and UK tax deadlines in one calendar puts these dates beside the US ones.
How the UK return feeds the US foreign tax credit
The UK return fixes the UK tax on each kind of income, and that figure is what the US return credits. Tax taken through payroll is known from payslips. Tax on dividends, rent and gains is known only once the UK computation is done, so the US credit for that income waits on the UK return.
The US credit is claimed on Form 1116, which sorts income into categories and limits the credit in each one. A salary falls in one category and dividends in another, so surplus UK tax on earnings cannot be used against US tax on investment income. Payroll tax is paid in the same calendar year as the salary. UK tax settled through Self Assessment is paid later, which is why Publication 514 (opens the official IRS page in a new tab) and its choice between claiming tax when paid or when accrued matter more once a UK return exists.
Take a US citizen employed in Manchester on a salary taxed under PAYE, who also receives dividends from a US brokerage account above the UK dividend allowance. The UK return reports the dividends on the foreign pages and credits US tax up to the treaty rate. The US return reports salary and dividends together, credits the UK payroll tax against the salary, and deals with the dividends under the treaty's rules for US-source income. If the UK return is never filed, the UK tax on the dividends is never paid, and the two returns no longer agree. Our individual tax returns work starts from that reconciliation.
What happens if a UK return was due and never filed
The tax is still owed, with interest, and penalties can follow. HMRC can charge a penalty for failing to notify it by 5 October, and once a return has been issued and is late, the initial late-filing penalty is £100, with more added as the delay grows.
The failure to notify penalty is worked out as a percentage of the tax still unpaid at 31 January after the tax year. A person who registers late but files and pays by that date therefore often has little or nothing to be penalised on. The percentage depends on behaviour and on whether the person came forward before HMRC asked, and a reasonable excuse can remove it. The Self Assessment penalties (opens the official GOV.UK page in a new tab) for late returns and late payment are separate.
Older years are handled by disclosure. HMRC has longer to assess tax on offshore income than on UK income, and it receives account data from other countries, so waiting is not a strategy. Any extra UK tax paid for a past year also changes the foreign tax credit on the US return for that year, and the IRS must be told through an amended return. For that reason both countries are corrected together, as our cross-border tax service does. The wider picture is in our guide for Americans in the UK, and the related choice on the US side is covered in foreign tax credit or exclusion in the UK.
- List each tax year in which untaxed income or gains arose
- Register or disclose before HMRC writes, since unprompted disclosure is treated more leniently
- Compute the UK tax and the credit for US tax year by year
- Check each matching US return and amend where the credit changes
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
