Expanding your UK business to the US?
Don’t open an LLC before you read this.
The standard advice on US entity formation was written with US founders in mind — it doesn’t account for how HMRC treats the result, and that difference can be a costly one for a UK business owner.
In Anson v HMRC, a UK resident with a US LLC faced a 67% effective tax rate — the same income taxed once in the US and once again in the UK, with no relief available for the overlap. The case reached the UK Supreme Court, and it got there because the situation wasn’t unusual.
Form 5472
Penalty
BE-13 Survey
Max Fine
Usually
Wrong
This
Call
An LLC is the default recommendation. It’s also the structure that produced a 67% effective tax rate for a UK founder.
In Anson v HMRC, a UK resident with a US LLC found himself facing a 67% effective tax rate on income that had already been taxed in the US — the same money taxed twice, with no mechanism for relief. The case went to the UK Supreme Court in 2015, and it was notable not because it was an outlier, but because it demonstrated what can happen when US entity advice is given without any consideration of the UK tax position.
Formation services can open a US LLC in a matter of minutes. What they can’t tell you is how HMRC will treat it — because that’s outside what they do, and it simply isn’t their concern. So that particular question tends to go unanswered.
“The question isn’t whether an LLC is right or wrong as a structure. It’s whether the person recommending it has considered how HMRC treats it for a UK resident — and that’s usually a very different conversation.”
The right structure depends on your specific situation, and there isn’t a universal answer. The call is how you work that out.
These aren’t edge cases. They’re standard risks for UK founders in a wrong structure.
Foreign-owned US entities must file Form 5472 annually. Missing it — or filing it incorrectly — triggers an automatic $25,000 penalty per form.
The Bureau of Economic Analysis requires most foreign-owned US entities to file a BE-13 survey. Most founders have never heard of it. Maximum penalty is $44,000.
HMRC and the IRS don’t always treat the same entity the same way. When they don’t, the same income can be taxed in both jurisdictions — with no relief available.
IRS and HMRC requirements that sit between your UK and US advisers — neither of whom may know the full picture.
Thirty minutes with someone who understands both sides — before you commit to anything.
Which structure is appropriate for your specific situation — not a default recommendation given without knowing your UK position.
HMRC’s treatment of foreign entities isn’t always what formation services assume. That matters before you file anything.
The annual requirements for foreign-owned US entities that most formation services don’t mention — and the consequences of missing them.
Not every risk applies to every business. The call identifies which ones are relevant to your structure, revenue, and operating model.
If you’re working with existing UK or US advisers, you’ll leave the call knowing what to ask them — and what they may have missed.
You’ll know what you’re walking into before you set anything up. Not a list of risks. A straight answer for your specific situation.
UK businesses planning a US expansion — before they’ve committed to a structure.
Trading, with real revenue — not a start-up or a holding structure.
Actively planning — not just researching. You want to move when the time is right.
Founder, CEO, CFO, or Director — with the authority to act on what you hear.
The call is most valuable before you file anything. The right time to ask these questions is before the structure is in place.
Free US expansion consultation
with a dual-qualified accountant.
Choose a time that suits you. We’ll send a confirmation and a short pre-call questionnaire — three quick questions so we can make the most of your 30 minutes.
Blane Reed — Chartered Certified Accountant
Blane works exclusively with UK businesses building a US presence. He holds qualifications in both UK and US tax — a combination that is genuinely rare in practice, and the reason this call can cover both sides in a single conversation.
The advice you’ll get here is built on visibility of both jurisdictions. Not UK tax advice that assumes a US structure. Not US formation advice that ignores HMRC. Both, together, for your specific situation.
US Tax Specialist
Entity Formation
Cross-Border Planning