Can HMRC Come after Me in U.S. for Unpaid Tax Bill?

Hello.  I lived in UK for several years for work, then returned back to U.S.  My taxes were prepared every year by company provided preparer and paid diligently on time.  About a year after I left and came back to U.S., I received a notice that I had a tax bill due for that year (well after I had returned home).  It is now approx 4 years on, and HMRC (UK version of IRS) has sent me a notice indicating they "may report my debt to the authorities in the country where you reside or have assets.  We may also ask them to start debt recovery proceedings."

My question is, is this legal, likely, or even possible?  Or just idle threats and sabre-rattling?

I am looking for expert and/or definitive answers, not guesses or speculation, please.

When you received the bill did you question it? Or ask HMRC to provide any information to substantiate the tax bill? And given that the UK tax year is not a calender year, are you sure that your final tax return was prepared and any tax due was paid?

If you didn't contact HMRC, you should have. Unfortunately the worst thing anyone can do is ....do nothing.

Can HMRC report it to the IRS, or whoever in the USA? Sure they certainly can; will they - I don't know as I have no personal experience with this.

On a public forum the best you can expect is speculation. Do you believe the HMRC bill to be correct?....if so just pay the tax and move on.

I agree with nun - sometimes it's best to just settle it once and for all.

On a public forum the best you can expect is speculation.

This is not really a correct statement.  A public board can still have experts or people that have had direct experience with a given, specific situation as members and willing to respond.  Such responses would not qualify as speculation, at least as I see it.  The point is I am able to speculate and Google with the best of 'em, so I don't really need that, or advice like "just pay it...it's what I would do".  I need what I don't have...an expert's viewpoint or thoughts from people who have had a similar experience.

First off find out if the bill is legitimate....contact HMRC and the accountants that did your taxes when you were in the UK. If the bill is legitimate pay it.

First off find out if the bill is legitimate....contact HMRC and the accountants that did your taxes when you were in the UK. If the bill is legitimate pay it.

+1

If the bill is legitimate and you don't pay it then you have broken UK law.  I don't personally know anyone who has had HMRC come after them in a foreign country for unpaid taxes, but I don't see why they wouldn't pursue the matter, and I wouldn't want to chance it.

On the other hand, if the bill is not legitimate, it may take you many hours of long distance phone calls, protracted correspondence, dealing with unknowledgeable but rigid bureaucrats etc. to sort it all out. One may experience this with certain other tax agencies. So my sympathies and understanding that you may wish simply to ignore them in good conscience.

This is not really a correct statement.  A public board can still have experts or people that have had direct experience with a given, specific situation as members and willing to respond.  Such responses would not qualify as speculation, at least as I see it.  The point is I am able to speculate and Google with the best of 'em, so I don't really need that, or advice like "just pay it...it's what I would do".  I need what I don't have...an expert's viewpoint or thoughts from people who have had a similar experience.

With all due respect, experts (professionals) are not in the habit of giving 'free advice' on most forums. Some on here do provide generic information or links to IRS/HMRC information, but none are likely to 'tell you what to do'. Further, without knowing the specifics of your situation, even if someone here had a similar experience, it might not be directly applicable to you.

You have 3 choices:

1) do nothing - which hasn't made it go away, given the last correspondence from HMRC;
2) pay the bill and get on with your life;
3) or, if you think HMRC is in error, then write to them asking for specifics and provide evidence of your last filing and tax paid.

The general rule in most cases is ignore the tax man at your peril. In my first response I asked if you had contacted HMRC - and you haven't answered that question. You might be able to check your record on-line; I can, but I file a self-assessment, and I'm not sure how it works on a PAYE scheme, which I assume would have applied to you. like it or not, if you do owe the tax, then you need to pay it.

This is not really a correct statement.  A public board can still have experts or people that have had direct experience with a given, specific situation as members and willing to respond.  Such responses would not qualify as speculation, at least as I see it.  The point is I am able to speculate and Google with the best of 'em, so I don't really need that, or advice like "just pay it...it's what I would do".  I need what I don't have...an expert's viewpoint or thoughts from people who have had a similar experience.

Then go speak with an accountant.

My question is, is this legal,......

I realise the OP has exceptional Googling abilities, which leads me to wonder why this question?

Surely they investigated the US/UK Double Taxation Agreement (2001) and Amending Protocol 19 July 2002, at Article 27(5).

When we left the UK, we let HMRC know and filled out the last assessment form.  The next year we didn't file, as instructed by HMRC.  Penalty arrived.  We called.  They said don't pay.  They resent bill.  More calls....  They said all clear.  Same thing happened for 3 years, until finally the HMRC said they would send a letter stating that we no longer have to file, so that we could provide them with a copy of it the next time they send us a penalty:)  Took lots of calling, and the same thing may happen again, but at least we have a letter!!  We keep money in the UK, and are dual citizens so didn't want to mess them about.

I'd call the accountants and write a letter/call HMRC. It might be that HMRC just don't know that the OP left the UK. Was a P85 filed and is your HMRC tax code correct?

When we left the UK, we let HMRC know and filled out the last assessment form.  The next year we didn't file, as instructed by HMRC.  Penalty arrived.  We called.  They said don't pay.  They resent bill.  More calls....  They said all clear.  Same thing happened for 3 years, until finally the HMRC said they would send a letter stating that we no longer have to file, so that we could provide them with a copy of it the next time they send us a penalty:)  Took lots of calling, and the same thing may happen again, but at least we have a letter!!  We keep money in the UK, and are dual citizens so didn't want to mess them about.

From what I hear on the BBC Moneybox program this situation is very common.  PAYE works great much of the time but once folks do self assessment or even have 2 or more jobs and then HMRC get it wrong, it takes folks many attempts to get things put straight.

It seems a no-brainer to me that the first thing OP should do is contact HMRC to clarify the situation rather than ignore them.