Hotscot

IRS has a heart: ‘Get Out of Jail Free’ card for first-timers | LVB

NJ_Expat

Yes, I already hired a US accountant who filed my taxes for 2017, so that is in order already, it is just the UK side of things I need to sort now.

Is this something my employer should have done immediately upon my relocation to the US, or only after I'd filed the relevant forms to the IRS, which then notifies the UK of my employment status and number etc?

civilservant

I'm confused. I didn't think you had filed anything in the US with any professional help yet, but apparently you already have a professional retained? He didn't mention that there is a tax treaty between the US and the UK? If he didn't know, or didn't mention it, or didn't investigate, you need to fire him and get someone versed in that law.

NJ_Expat

Yes, he did notify me of the treaty and some potential options but didn't want to get involved with anything else on the UK return. At the time I was told that the UK side of things was very simple, so I didn't look for an accountant who could complete everything in both countries - appears that was probably a mistake.

MidAtlantic

I think there are two issues here. Your employer is unaware/ignoring the obligations of employing someone resident in the USA. This seems to include failing to operate tax withholding etc.. That is their issue but it will impact you. Did your US accountant not raise this as an issue?

Secondly you are viewing UK taxes and US taxes as separate issues, whereas they are totally inter-dependent.

I strongly advise you to obtain professional help from someone experienced in expat taxes who can handle both sides and get things in order. Once that is done you may well be able to manage it yourself for the future.

All the best!

NJ_Expat

Yes, I am actually in the process of hiring an expat accountant - hopefully they'll be starting on my UK return and related paperwork early next week. I'll also speak to my employer asap to ask them why they haven't updated things on their side.

One quick question - once this return is done (for the UK in 2017/2018), will I still have to file returns for 2018/2019 and future years (in the UK) if I am no longer paying taxes in the UK?

Thanks again everyone.

Cook_County

The employer may have ECI and a requirement to file Form 1120-F (plus any State equivalent). The employer's failure to operate Federal and State withholding from your wages is probably the main issue for them - but needs to get tied into the other problems they have made by ignoring US law. Is the employer going (at this stage) to provide you with W-2s for 2017 and 2018?

Hotscot

'will I still have to file returns for 2018/2019 and future years (in the UK) if I am no longer paying taxes in the UK?'

Just anecdotal, been here 20 years, when they asked me to do a return a year after moving here I just informed them, in writing, that I no linger live in the UK.
I've had some interaction since then but no demands.

NJ_Expat

Great, that's good to know! Whilst I took far too long to do it, I've now informed them via the P85 form that I'm no longer in the UK and the accountant I've just hired seemed confident that once we have this return done, they'll assign me an NT (no tax) code and won't require anything else in the future.

Cook_County

Do remember that all UK accountants have a legal duty to inform the UKs NCA if they suspect there may be tax evasion taking place in the United States. You'd really want your employer to start correcting things before the two governments start exchanging data about your personal finances. It is your employer that has messed up by failing to withhold Federal and State tax. Is your employer correcting this?

NJ_Expat

Yes, I'm due to speak with my accountant tomorrow about this - among other things - to find out exactly what I need to instruct my employer. Glad to hear that the fault is on their side rather than mine - I had no idea about any of this until now... I always thought it only had to change once my first returns were done in both countries and the UK had stopped charging me tax. Thanks for all of the advice!