Working for the US govt, avoiding UK taxes?

I know this is probably a long shot, but here it is: my wife is a US citizen who has been living in the UK for 2 years. She works for the US government. Her salary is paid gross (in GBP) without deduction of UK income tax. Is it possible for her to legally avoid paying UK taxes as a non-UK domiciled individual by having it paid into a non-UK account, e.g. on the Isle of Man? We would not be remitting any of her salary to the UK. Thanks.

She should not be paying tax in the UK under the US/UK tax treaty, which says that certain US government employees are exempt from UK tax - even if the monies are deposited and remitted to the UK.  We need to know very gory details to know if this exception works - what division hired her, is US SS tax withheld, where she performs her work, etc., etc.  Take this issue up with a tax preparer working in the UK familiar with the US/UK tax treaty.

If the treaty does not apply, then no, your clever clogs idea won't work.  There is one possible exception, and that is if she is working on US soil within the UK.  Usually, this is defined as the Embassy or a US military base.  If she is on US soil, then her workdays are considered offshore.  Therefore, paying it offshore and not remitting it should work for up to seven years.  I do NOT know the definition of US soil in the UK, therefore I can NOT confirm this theory; hopefully Guya knows the definition better.  Otherwise, you'll have to pay a UK person knowledgeable in sovereignty issues to advise you.

Hi, many thanks for your help. Yes, she is working inside the US Embassy. I have asked her to check with her employers if they would agree to pay her salary into an offshore account (if not there is obviously no point in carrying this forward).

About the US/UK tax treaty, would it be possible for you to recommend a tax preparer who is familiar with the issue? My wife contacted a few in the past to help her with her tax returns (before she found a job) but they were too busy to help her.

There are many excellent US preparers in the UK; Lizzit among them.

Other firms you might want to contact if you want comparisons on qualifications, service and price include Frank Hirth & Co and US Tax & Financial Services Ltd. 

"Too busy" is usually a euphamism for "Our fees are way higher than you're likely to be willing or able to pay".  Sometimes it's shorthand for "It's a week before the 15th, and you're calling me now?  Just because it's DUE on the 15th doesn't mean you DO it on the 15th."

You say she is working "inside the Embassy", but that is not gory detail.  Gory detail is who pays her, what department does she work for, what payroll, civilian or military or other governmental posting, etc., etc., etc. 

Please do NOT post gory details here.  Please take your query offline to a paid professional.  Most offer a short free introductory phone call where you can quickly sort out whether or not the treaty will apply, and if not, whether the workday issue can apply instead.  You would then pay them to prepare the resulting UK SA returns with their respective claims, and also make any resulting adjustments to any US tax returns.

There are many excellent US preparers in the UK; Lizzit among them.

Other firms you might want to contact if you want comparisons on qualifications, service and price include Frank Hirth & Co and US Tax & Financial Services Ltd. 

Thanks, I contacted both Frank Hirth and US Tax & Financial Services, and they were very professional (she probably won't have to pay UK taxes).

"Too busy" is usually a euphamism for "Our fees are way higher than you're likely to be willing or able to pay".  Sometimes it's shorthand for "It's a week before the 15th, and you're calling me now?  Just because it's DUE on the 15th doesn't mean you DO it on the 15th."

Let's see. In your case, my wife left a message on your website and on the phone back in November asking for help with her US tax return, but she never heard back from you. Hard to see why you would have thought her unable to pay your fees, unless you somehow deduced all that from her name alone. And November is nowhere near April 15, in my calendar. Thanks anyway.

Great.  They are both very good firms.   

I apologize for not getting back in touch with you quickly.  I was on holiday back in November, and the message feature on this website doesn't notify me when there's a message.

If your wife is working in the US embassy ie US soil why wouldn't you just file like any US citizen living in the US and use something like Turbotax