us-based self-employed income continued after move to UK, confused!!

I have been reading through the forum hoping to find the answers to my questions without having to start a new topic. Unfortunately I can't seem to find them. My husband, son and I moved here last June for him to take a job. Our sources of income in the US before we moved were my job, he was still a student at the time. We have an additional source of income from a home business I run selling items on the internet. I sell through a third party based in the US out of their warehouse. I ran this as a sole proprietor in Kentucky before we left and started selling again for the holidays after we moved here. We consider ourselves residents of the UK now, we have Tier 2 migrant visas and plan to be here for at least three years. We talked informally with family friends who are accountants in Kentucky before we left just to make sure there wasn't anything we needed to do as far as reporting income and residency. At the time we thought things would be rather simple to declare US income and declare UK based income to the UK which should be below the taxable threshold for the UK as I do not have a job over here.

Unfortunately as the tax deadline approaches it is becoming a much more daunting process that what we envisioned. Now for the questions:
1. How should we report my internet-based income earned since the time we have moved to the UK?
2. How do we determine the residency for US-based taxes, in particular the state of Kentucky as we have found their website and help sections to be lacking?
3. Do we get an automatic extension because we are overseas as we have read elsewhere or do we have to file for it?
4. Any suggestions on how to go about declaring and reporting income to HMRC for my internet-based income?
5. Our total foreign assets are less than US$10,000 - do we still need to declare or report anything?

Any help, guidance or suggestions are greatly appreciated! I do apologize in advance if there are prior posts that address this, but I could not find any. This is a great website and resource and thank you for any help you can offer!

If you are running your business from the UK you must pay UK tax on any income/profits you take from it. You will also need to pay UK National Insurance. You will need to do a UK Self Assessment. You will be able to take a foreign tax credit on your US taxes for UK tax you pay on your UK income.

Call or email Kentucky DOR about residency

More than just paying tax in the UK, you are required to have registered as self-employed and pay UK tax & NIC on business profits. Depending on turnover you may be required to be VAT registered.

To answer a few of your additional questions, as long as you are living abroad, you will qualify for an automatic extension until June 15th before your tax returns are due (when you file your return just make a note saying you live abroad and thus qualify for the auto extension). Any taxes owed should still be paid by April 15th however, so if you expect to owe, it will be best to make an estimated payment.

For your foreign bank accounts, if they never combined to have more than 10K in them, then no reporting is necessary. As soon as you do cross that 10K threshold, a FBAR liability will be triggered.

You will also have to report your worldwide income on your US tax returns. To keep from paying SE taxes twice, make sure to obtain a certificate of coverage from HMRC and include that with your US return.

Good luck!

Don't forget that April 15th is no longer a relevant date; indeed if you file this early in the year you may end up paying the healthcare penalty which you may consider undesirable.

Thanks for the help, everyone. Sorry for the long delay in responding!