A UK accountant can handle your British taxes perfectly well and still not cover the separate US rules that follow an American living abroad.
Take Sarah, an American who has lived in Bristol for six years. She earns a UK salary, has a workplace pension, puts money into an ISA and does a little freelance work on the side. Her UK accountant deals with her British tax affairs.
Nothing seems particularly complicated. From the US side, though, the same finances can look rather different.
Your UK accountant and US tax adviser are answering different questions
A UK accountant may deal with PAYE, Self Assessment, UK Income Tax, Capital Gains Tax and National Insurance. That’s exactly the expertise Sarah needs in Britain.
Her US return introduces another layer. US citizens and resident aliens abroad are generally subject to US income tax rules on their worldwide income and to the same basic filing requirements as people living in America.
That can mean looking at foreign tax credits, foreign earned income rules, overseas accounts, investments, pensions and, for some taxpayers, foreign businesses.
Both advisers can therefore give perfectly sound advice while answering different questions.
“I’ve already paid HMRC, so isn’t my tax finished?”
Paying the correct UK tax doesn’t automatically satisfy an American’s US filing obligations. Sarah’s employer may have deducted UK tax from her salary, but that salary still forms part of the worldwide income considered under US rules.
There are mechanisms designed to address cross-border taxation. Qualifying foreign income taxes may, for example, be eligible for the Foreign Tax Credit. Some Americans abroad may instead qualify for the Foreign Earned Income Exclusion (FEIE) if they satisfy its requirements.
Neither should be interpreted as meaning that paying HMRC automatically removes the need to consider a US return.
Ordinary UK finances can look different to the IRS
Some US complications arise from financial arrangements that seem completely routine in Britain.
Sarah’s current and savings accounts may need to be considered for FBAR purposes. Her ISA receives favorable treatment in the UK, but that doesn’t mean the US automatically follows the same treatment. Foreign investments and pensions can introduce further US questions.
Even Form 8938 is separate from the FBAR and has its own thresholds. For qualifying taxpayers living abroad, those thresholds are higher than for taxpayers living in the US and vary according to filing status.
An ISA shows where the two systems can diverge
An ISA can be tax-efficient in Britain without automatically receiving equivalent treatment under US tax rules.
For the UK 2025/26 tax year, the overall ISA subscription limit is £20,000. Within the UK system, interest, income and capital gains inside an ISA receive tax advantages.
Suppose Sarah asks her UK accountant whether putting £10,000 into a stocks and shares ISA makes sense. From a British perspective, that’s an entirely ordinary question.
Because she’s American, though, there’s another one: what exactly is she buying inside the ISA, and how will the US treat it?
Certain non-US investment arrangements can require additional US analysis. So the wrapper being tax-advantaged in Britain doesn’t, by itself, settle the American side.
You can owe no extra US tax and still have reporting obligations
A US person generally has an FBAR requirement when they have a financial interest in, or signature authority over, reportable foreign financial accounts whose aggregate value exceeds $10,000 at any point during the calendar year.
Sarah could therefore have little or no additional US income tax to pay and still need to report foreign accounts.
Instead of asking only, “Do I owe the IRS anything?”, an American abroad also needs to ask, “What am I required to report?”
Business owners and freelancers can face another layer
If Sarah’s occasional freelance work grows into a business or she becomes an owner of a UK limited company, additional US tax and information-reporting rules may need to be considered. The IRS specifically identifies certain foreign-corporation ownership situations as potentially requiring Form 5471.
At that point, assuming a UK business structure will be treated identically by the US becomes particularly risky.
The answer may be coordination, not replacing your UK accountant
Your UK accountant may still be exactly the person you want handling your British affairs. The missing piece is simply understanding how those same earnings, accounts, investments and businesses look from America.
For people with more involved finances, that can mean combining local expertise with one of the UK’s leading US tax firms rather than choosing one adviser or the other.
It’s really one financial life viewed through two tax systems. And sometimes, quite reasonably, that means you need expertise in both.