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Topic: should there be UK tax withholding on my paycheck?  (Read 1197 times)

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should there be UK tax withholding on my paycheck?
« on: February 19, 2018, 05:27:34 PM »
My husband and I are both US citizens (only).  He has worked for a UK corporation in the US for some years, and was transferred "on assignment" to the UK in summer 2017 for two years (Tier 2 ICT visa).  While here, he is continuing to be paid in US$, I assume for some reason that benefits the corporation and also something about maintaining Social Security (?).  I'm on unpaid leave from my US job, but have picked up some temp work here (zero hours contract), and I'm of course being paid in GBP for that.

Obviously we have to file US returns, which my husband always does through TurboTax, and he'll continue to do that.  His corporation said they'll handle his UK tax return for him, but I'm on my own, since in the UK there's no filing married and everyone has to do their own.  Probably I will need to hire an accountant to do this, as most of the posts on here are way above my head.  I realize the UK tax year doesn't start till April, so there's no immediate rush on that.

My question: I notice on my UK paychecks that no tax is being withheld.  I haven't earned much so far (<GBP 2,000 total).  Is the non-withholding because I haven't met some income threshold yet?  Is there in fact a UK income level below which I wouldn't even need to file a UK return? Or, is the lack of withholding a problem that I need to address right away with an accountant, to make sure I am not getting penalties.  (i.e. start making monthly payments or something?)  I've always had tax withholding on all my US paychecks...

Thanks and please keep any answers very simple.  :)


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Re: should there be UK tax withholding on my paycheck?
« Reply #1 on: February 20, 2018, 12:00:46 PM »
There is a personal allowance, currently £11,500, below which you would have no liability. Your employer will have applied a PAYE coding, either as notified by HMRC or an "emergency" code. The emergency code gives you 1/12 of the personal allowance each month. Have a look at your payslip.

You only need to submit a tax return if asked by HMRC or if you owe tax. Otherwise there is no requirement. Most UK individuals  do not submit self-assessments.


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Re: should there be UK tax withholding on my paycheck?
« Reply #2 on: February 20, 2018, 12:09:53 PM »
Thank you so much!  That is very clear and helpful.


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Re: should there be UK tax withholding on my paycheck?
« Reply #3 on: February 20, 2018, 12:14:07 PM »
... And looking at my payslip I see there is a "Tax Code" of 1150L - which would make sense for the PAYE allowance figured on a 10-month basis (I work at a school and some schools pay over 10 months instead of 12 months).  Thanks again!


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Re: should there be UK tax withholding on my paycheck?
« Reply #4 on: February 20, 2018, 01:53:13 PM »
... And looking at my payslip I see there is a "Tax Code" of 1150L - which would make sense for the PAYE allowance figured on a 10-month basis (I work at a school and some schools pay over 10 months instead of 12 months).  Thanks again!

Looks like you are good to go.

Be sure you track all your earnings during the year, then when you file your US taxes next year you will be asked if you had any foreign earnings in 2018 and you'll need to report the gross amount for the calendar year, but will be able exclude all your earnings using form 2555 as you will be well under the maximum for the Foreign Earned Income Exclusion (FEIE).

I mention this now as I told my son the same thing when he moved here last year and started working in October but now that we are collecting the documents to do his US taxes he can't find his end of December pay statement so we took his January statement which has the gross payment this pay period and the UK tax year to date total and figured out his 2017 UK gross.
Dual USC/UKC living in the UK since May 2016


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Re: should there be UK tax withholding on my paycheck?
« Reply #5 on: February 20, 2018, 02:04:33 PM »
Oh good to know, because I did earn some UK money in 2017, so I'll make sure to add that in for my US 2017 tax return.  Thanks!


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Re: should there be UK tax withholding on my paycheck?
« Reply #6 on: February 20, 2018, 02:22:43 PM »
Oh good to know, because I did earn some UK money in 2017, so I'll make sure to add that in for my US 2017 tax return.  Thanks!

TurboTax handles the FEIE forms very nicely so your husband should have no problems adding that to your US tax return
Dual USC/UKC living in the UK since May 2016


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