Alistair Bambridge is the founder of Bambridge Accountants, an accounting firm that helps expatriates in staying tax complaint when reporting foreign income once they move overseas. Remaining tax compliant when they relocate overseas is often an oversight for many Americans, and Alistair is focused on helping them find a stress-free way to catch up with their tax obligations.
Alistair was able to answer some questions giving more detail about his firm.
Hi Alistair, what is your background and story of creating Bambridge Accountants?
I set up Bambridge Accountants in 2010, wanting to specialize in the creative industries. We have built up that side and can offer advice on tax allowances and planning, which is unique for actors and those in the film and stage industries.
Alongside that, I had an interest in US tax, and so we included that as a second specialism – for many of our clients we handle both their US and UK taxes. On the US side, the specialism is US expats, but many of those are also in the creative industries.
We set up a second office in New York, focusing on actors, musicians, artists, writers and those in the fashion industry. We also look after UK expats living in the US and helping them to report in the US and UK with foreign income.
Can you explain the two types of streamlined filing compliance?
For many Americans, once they move overseas, they don’t realize they still need to file US tax returns each year.
If you are living overseas, to catch up on taxes, the best route is the streamlined foreign offshore procedure. You file the last 3 US tax returns (all returns before that are waived) and a disclosure document (Form 14653) to show that you did not deliberately avoid paying US taxes.
As a US citizen with a bank account and other financial accounts outside the US, you need to file a foreign bank account report (FBAR) each year. As part of the streamlined foreign offshore procedure, you will file FBARs for the last 6 years.
The main benefit of the streamlined filing procedures is there are no late filing penalties.
If you are living in the US and have foreign income and foreign accounts, you would use the streamlined domestic offshore procedure – although this offers you protection for late filing, you may have some penalties for not filing FBARs under this route.
How do you simplify accounting for expatriates? Why is it important?
The US reporting for expats is complex – for example, if you set up a business outside the US, there are additional forms to complete as part of your federal return. Especially if you have a foreign corporation or partnership, for most taxpayers those forms are difficult to understand and complete.
Another common scenario is selling your home while you are living overseas. In many countries selling your home is tax free, while in the US you are exempted from $250,000 on a gain on your share of your home. Many Americans don’t realize until after the sale that if they have made more than $250,000 on their foreign home that they will have a significant tax bill to pay in the US.
We are here to help to advise on the situations where there will be potential US tax issues for expats – putting in place simple solutions to stop any additional US tax and make sure that all the forms that are required are included in the US return each year.
What are the different demands of tax compliance for people working in industries like film, graphics design, music + more?
One of the main issues is that income fluctuates from year to year, and so budgeting for tax is key. If you do have a really good year, then the tax bill can come quickly, and you will have that to pay plus the estimated payments for the following year.
Definitely when you have an increase in income, if you file early and then you know how much tax is due and can start paying that off, rather than having a shock just before the deadline.
For actors and others in the film and stage industries, there are many expenses that can be claimed that most other self-employed individuals can not claim. It’s really important to have a chat with an accountant or tax adviser who specializes in film and stage, and they will be able to walk you through all the expenses that can be claimed.
What do you think makes Bambridge Accountants stand out from other firms?
We focus on being approachable, and although the tax code can be daunting, we want clients to feel as though they understand the rules and the reporting that needs to be done each year.
On the US side, when reporting foreign income, claiming the foreign earned income exclusion and foreign tax credits, using the US tax treaty – we explain which option is best for each client for the current year and then also the impact that will have for their long-term tax planning.
There are some very complicated tax forms and reporting that US citizens may not know that they need to file (with some high penalties for not filing), and we will run through each client’s situation in detail and complete all the forms. Common forms that clients are not aware of are foreign asset reporting (FATCA, form 8938), fund reporting (groups of shares, PFICs – form 8621), gift reporting from and to non-US citizens (form 3520) and reporting 10% or more ownership in a corporation outside the US (form 5471).
Are you planning to expand your services in the future?
Both the London and New York offices continue to grow each year, and we are looking to add additional staff for both offices in 2020 and 2021.
The next step would be to open an office on the West Coast, possibly in California to work again with actors and the film industry there. Also to look after UK expats in California and help with their UK and US tax reporting each year.
Thank you Alistair for your time!
You can connect with Alistair Bambridge at https://uk.linkedin.com/in/alistair-bambridge-b2a48b35
