LLC for UK Founders
A UK resident can form and own a US LLC remotely, with a passport and no SSN. The US side is usually simple. The hard part is the UK side: HMRC has long treated most US LLCs as companies rather than as see-through entities, which can leave you taxed twice unless the structure is planned with a UK adviser first.
Key takeaways
- You can form a US LLC from London, Manchester or Edinburgh without visiting the US.
- The US treats a single-member LLC as transparent by default. HMRC's published view is that most US LLCs are opaque, so the two countries may tax different people at different times.
- In June 2026 the UK government consulted on letting UK-resident individual members treat their US LLC as transparent. As of September 2026 no change has been enacted.
- UK residents are taxed on worldwide income on the arising basis from 6 April 2025, so LLC profits end up on your Self Assessment return one way or another.
- A UK-owned single-member LLC files Form 5472 with a pro forma Form 1120 with the IRS every year.
Why UK founders look at a US LLC
The usual reasons are commercial rather than tax. US enterprise buyers sometimes prefer to contract with a US entity. Some US marketplaces and app stores pay out more smoothly to a US company with a US account. And a US address and phone number can shorten sales cycles with American customers.
If most of your customers are in the UK or Europe, a UK private limited company may be the simpler vehicle. Our UK company registration service covers that route, and some founders end up with both.
The UK tax problem, explained plainly
For US tax, a single-member LLC is a "disregarded entity". The IRS treats the profit as yours. For UK tax, HMRC has said since 1997 that it generally regards US LLCs as opaque, meaning the LLC is treated like a company and you are taxed on what it distributes to you, not on its profits as they arise.
In the 2015 Anson case, the Supreme Court found that a particular Delaware LLC member was entitled to the profits as they arose, which allowed double tax relief. HMRC then said the decision was specific to its facts and that it would continue its general opaque view. HMRC's guidance on this sits in its International Manual at INTM180050.
Why this matters: if the US taxes the LLC's profit in your hands and the UK taxes a later distribution as a dividend, credit for the US tax may not line up with the UK tax. That mismatch is exactly what the 2026 consultation tries to fix.
The June 2026 consultation
On 10 June 2026 the government published a consultation on reforming the taxation of UK-resident individual members of US LLCs and similar "reverse hybrid" entities. The proposal would let those members treat their holding as transparent for Income Tax and Capital Gains Tax, taxing them on underlying profits so double tax relief works. The consultation closed on 31 July 2026. Until legislation follows, the existing HMRC view still applies.
When the US taxes you at all
A UK resident who is not a US person is taxed in the US mainly on income effectively connected with a US trade or business. If you run the business from the UK, with no US office, staff or dependent agent, the US-UK income tax treaty generally lets the US tax your business profits only if they are attributable to a permanent establishment in the US.
So many UK owners of service or software LLCs owe no US income tax. They still have US filing duties, covered below. If you do have US tax, the treaty and UK foreign tax credit rules decide how much relief you get in the UK.
National Insurance and US self-employment tax
The IRS does not impose US self-employment tax on nonresident aliens unless a Social Security totalization agreement requires it. The US and UK have such an agreement, designed so you pay into one system, not both. Check your position with HMRC if you spend significant time working in the US.
What you file, and where
| Filing | Who receives it | When | Applies to |
|---|---|---|---|
| Form 5472 with pro forma Form 1120 | IRS | April 15 for a calendar year LLC, by fax or mail | Every foreign-owned single-member LLC |
| Form 1040-NR | IRS | June 15 if you had no US wages | Only if you have US-taxable income |
| State annual report | State of formation | Varies by state | Most states |
| Self Assessment with foreign pages (SA106) | HMRC | 31 January after the tax year for online returns | UK residents with foreign income |
The IRS penalty for not filing Form 5472 is $25,000. It applies even when the LLC owes no US tax.
Choosing a state as a UK founder
If you have no US premises, you can form in any state. Wyoming ($100 filing, $60 minimum annual report tax) and New Mexico ($50 filing, no LLC annual report) keep running costs low. Delaware ($110 filing, $400 annual LLC tax per the Division of Corporations) is familiar to investors but costs more each year. See our Wyoming vs Delaware vs New Mexico comparison for the detail.
Step-by-step for UK residents
- Speak to a UK accountant about the HMRC classification point before you form.
- Choose a state and appoint a registered agent there.
- File Articles of Organization and sign an Operating Agreement.
- Apply for an EIN with Form SS-4 by fax to the IRS international line. Fax replies generally take about 4 business days; mail takes about 4 weeks.
- Open a US business account using your passport, UK proof of address and company documents.
- Diary the Form 5472 deadline, the state annual report, and your UK Self Assessment.
Documents to have ready
Gathering these before you start saves a week or two of back and forth with the bank and the IRS:
- A valid UK or other passport, scanned in colour
- Proof of UK address dated within the last three months, such as a council tax bill or bank statement
- A one-paragraph description of what the LLC will sell and to whom
- Your website or a product link, even if it is a simple landing page
- The name of the person who will be the "responsible party" on the EIN application, normally you
If the LLC will have a UK company as its member instead of you personally, add the UK company's certificate of incorporation and register of members. The IRS and banks then look through to the individuals who control that company.
Common mistakes
- Assuming the US and UK agree on who is taxed. They often do not for LLCs.
- Treating the LLC like a UK Ltd for director's loan purposes. The rules and records are different; keep clean books from day one.
- Forgetting Companies House is not involved. A US LLC is not registered in the UK unless it sets up a UK establishment, which has its own filing rules.
- Using the registered agent address for banking. Many banks reject it as a business address.
This is general information, not tax or legal advice. A CPA in the US and a UK chartered tax adviser should confirm how the rules apply to you.
How long you have after year end
US filing deadlines are counted from the end of the tax year. For a calendar-year single-member LLC, Form 5472 with the pro forma Form 1120 is due on the 15th day of the fourth month, and Form 7004 extends it by six months. A Form 1040-NR with no wages is due on the 15th day of the sixth month.
| Filing | Months after year end |
|---|---|
| Form 5472 with pro forma 1120 | 3.5 months |
| Form 5472 with a Form 7004 extension | 9.5 months |
| Form 1040-NR with no US wages | 5.5 months |
Frequently asked questions
Is a US LLC or a UK Ltd better for a UK founder?
For a business with UK customers and a UK-based owner, a UK Ltd is usually simpler because HMRC understands it and there is no classification mismatch. A US LLC makes sense when US customers, platforms or payment rails are the priority. Some founders run both.
Does the US-UK treaty stop double taxation automatically?
No. The treaty gives rules and relief, but relief depends on both countries seeing the same income in the same hands. HMRC's opaque view of most LLCs can break that link, which is why the 2026 consultation was opened.
Do I need an ITIN?
Only if you must file a US personal return, such as Form 1040-NR, or claim certain treaty benefits. Forming the LLC, getting an EIN and filing Form 5472 do not need one.
Can I convert my US LLC to a C-Corp later?
Yes. Many states allow a statutory conversion, or you can elect corporate tax treatment with the IRS. A C-Corp is opaque for both US and UK purposes, which some UK founders prefer, but it brings US corporate tax on profits. Read how LLCs are taxed before deciding.
Do I have to report the LLC on my UK return even if I took no money out?
Under the current opaque view, you are generally taxed on distributions rather than retained profits, but reporting rules and anti-avoidance provisions can still apply. Ask your UK adviser what to include.
Want the US side handled correctly from day one? Start with our US LLC formation service, and book a CPA consultation if you want the US filing picture checked.
