American Corporate Employee Moves to the UK
The number of US professionals relocating to the UK is steadily rising, with nearly 30,000 employees from the US moving to the UK each year, according to the UK Office for National Statistics. Many of these moves are driven by finance, technology, and consulting roles, with companies like JPMorgan, Google, and BP facilitating expatriate assignments across the Atlantic. However, behind the excitement of moving abroad lies a maze of tax and legal requirements.
Understanding the implications of relocation is critical—US employees face tax implications in both countries, new UK employment laws, and complex visa requirements. According to the UK government’s tax residency rules, even short-term assignments can trigger dual tax obligations, leading to unexpected challenges for expats and employers. Here’s what you need to know.
If you are a UK employee moving to the US, check out our other tax guide. This guide is specifically for American Corporate Employees Moving from the US to the UK.
Key Companies and Job Titles
Finance: JPMorgan Chase, Barclays, Goldman Sachs
Roles: Financial Analyst, Compliance Officer, Investment Banking Associate
Technology: Google, Microsoft, Amazon
Roles: Software Engineer, Data Scientist, Cloud Architect
Energy: BP, Shell, Chevron
Roles: Petroleum Engineer, Project Manager, Global Operations Director
Understanding Dual Tax Obligations
For US citizens moving to the UK, double taxation can be challenging. The United States Internal Revenue Service (IRS) requires expats to file taxes on worldwide income, regardless of residency, which often leads to dual obligations. According to IRS.gov, the US Foreign Earned Income Exclusion (FEIE) allows qualifying expats to exclude up to $126,500 (2024 in foreign income from US taxes. However, they may still owe taxes on the same income in the UK if they exceed certain thresholds.
Tip: To offset these taxes, the US-UK Tax Treaty (source: Gov.UK) provides relief through foreign tax credits, which can reduce the overall tax burden for US expats.
Moving to the United Kingdom (UK) may require you to file self-assessment tax returns to HMRC each year.
The Streamlined Filing Compliance Procedures
The Streamlined Filing Compliance Procedures are designed to assist U.S. employees who have moved to the UK and unintentionally failed to file their U.S. tax returns or report foreign bank accounts, helping them get back into compliance with the IRS. This program offers a penalty-free option for those who can certify their failure to file was non-willful, allowing them to catch up on missed filings for the past three years and avoid severe penalties.
UK Employment Law Essentials
Employment law differs significantly between the US and the UK. From the UK’s mandatory holiday entitlements to robust employee protections, understanding these differences is crucial.
Employees are entitled to 28 days of paid leave annually, contrasting with the typical 10-15 days in the US. Companies should also ensure contracts comply with UK laws, which have stricter regulations around layoffs, redundancies, and work hours.
Tip: New assignees should review the UK Employment Rights Act to fully understand their rights and responsibilities.
Navigating UK Visa Options
US employees generally require a Tier 2 (General) visa to work in the UK. The Global Talent Visa is also available for high-skilled roles, especially within tech and academic fields. Companies need to provide sponsorship, but applicants are responsible for obtaining a Certificate of Sponsorship and ensuring they meet the income threshold (currently set at £25,600 for most roles).
Chicago to London – Financial Analyst at JPMorgan Chase
Scenario: Sarah, a Financial Analyst based in Chicago, is relocating to JPMorgan’s London office.
Steps:
Visa Application: Sarah applies for a Tier 2 Visa, with sponsorship from JPMorgan.
Tax Planning: As a US citizen, Sarah’s income is still taxable in the US. Sarah can use the US-UK Tax Treaty to offset her UK tax obligations through Foreign Tax Credits.
Employment Law: Sarah receives an updated UK employment contract outlining UK-specific entitlements, including annual leave and health insurance provisions.
Actionable Tip: Sarah’s relocation team coordinates with a cross-border tax advisor to minimise dual tax obligations. They consult the IRS’s FEIE policy, available on IRS.gov, to understand how to manage foreign-earned income exclusions effectively.
New York to London – Data Scientist at Google
Scenario: Daniel, a Data Scientist in New York, is offered a position at Google’s London office.
Steps:
Visa Application: Daniel qualifies for the Global Talent Visa, which enables more flexible immigration pathways.
Tax Obligations: By keeping his New York residence but earning in the UK, Daniel uses the Foreign Earned Income Exclusion and Foreign Tax Credits, reducing his total tax burden.
Legal Requirements: Google adjusts its contract to comply with UK laws, covering everything from data privacy under GDPR to UK health benefits.
Actionable Tip: Daniel consults with a UK employment lawyer to ensure his contract covers local legal requirements, particularly UK privacy laws and health provisions.
Common Questions (Q&A)
Do I need to file US taxes if I live in the UK?
Yes, the US requires tax filings from all citizens worldwide. Use FEIE or tax treaties to offset dual taxation.
What are the main visa options for working in the UK?
The Tier 2 (General) visa and Global Talent Visa are popular for US expats.
Will I have to adjust my employment contract?
UK contracts include mandatory benefits like paid leave and stricter work hours than US contracts.
Can I claim tax credits for UK taxes paid?
Foreign Tax Credits allow you to claim UK taxes paid, reducing your US tax burden.
How much income is excluded under FEIE?
For 2024, the Foreign Earned Income Exclusion excludes up to $126,500 in foreign income.
This guide provides the essential tools to navigate a US-to-UK corporate move, giving professionals the insights they need to make informed decisions.