Americans in the UK – key tax phrases.An American moves to the UK for 2, 3, 5+ years and upon arrival suddenly she has to learn British English, for business and private life. How might she begin ? Of course, this can be a very fun challenge, but a little daunting. You will see this article is not about diapers versus nappies (UK), or horseriding (UK) versus horseback riding. Instead, we are keen to share some standard UK tax words with you. Please also note, there are plenty of solid tax advisors (like me, Oliver) who can support you in the learning process, but you can always get a foothold in the language. Here are two key phrases that will appear very early on. First, CPA is not a term we use in the UK for advisors ( instead, we use tax advisor ATT, CTA; these are more commonplace). Second, the UK does not use the IRS to collect or assess taxes, instead HM Revenue & Customs fulfil this role.
We have prepared below an expat tax glossary for Americans arriving to live in the UK. Our firm’s full list of items is quite a bit longer than this list below. However, we know that there is no point in sending out hundreds of new British words, when you just need the headlines or “the skinny” in brief.
US CPA – UK accountants will list these as their qualifications : ICAEW or CTA or ATT or all three.
IRS – the British equivalent is HMRC or Her Majesty’s Revenue & Customs.
US Citizenship and Immigration – UK Visas and Immigration department.
US Calendar tax year – UK income tax year ends on 5 April of each year (yes, and this is quite rare).
US social security number – UK National Insurance number.
Tax planning – same word, and at my firm we have a strong list of expat tax reliefs available. Sorry, what a shameless plug !
THE TAX RETURNS
US Federal tax return – in UK, expatriates and UK nationals must file UK self-assessment tax returns.
April 15 US filing deadline – UK filing deadline is 31 January each year.
State tax return – no real UK equivalent.
Joint filing/Joint Assessment – not applicable in UK.
US ITIN – UK “UTR”.
ZIP code – post code.
Bank checking account – current account.
E-filing – online filing or e-filing.
W2 – nearest equivalent is UK Form P60.
GST – typically referred to as VAT or value added tax.
US withholding taxes – UK PAYE or pay as you earn.
Substantial presence test, US – a vastly different set of laws apply under UK Statutory Residence Test.
Exempt Income – sorry, not a common tax return phrase or concept in the UK !
Estate taxes – inheritance tax or inheritance tax.
Retirement benefit – UK state pension.
Realtor – estate agent.
Short and long-term capital gains tax – no equivalent; not applicable in UK.