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If you own a business in the US or UK but don't live there, your tax exposure is already active - whether you know about it or not. This hub covers every obligation, filing requirement, and treaty rule that applies to your situation.
A $25,000 IRS penalty for a missed filing isn't a worst-case scenario. For foreign-owned companies, it's a routine consequence of a common oversight.
Cross-border taxation is our specialty, not something we handle on the side. We work exclusively with non-residents, foreign business owners, and international entrepreneurs navigating US and UK tax systems.
Who We Work With
Amazon FBA, Shopify, and marketplace sellers with US or UK nexus exposure.
Software and digital product businesses generating US or UK-sourced income.
Remote service businesses with US or UK clients, contractors, or team members.
Non-Resident Pakistanis and global investors with cross-border income and treaty positions.
What Makes Us Different
Ecommerce sellers, SaaS founders, agency owners, remote workers, investors - these are the people we work with every day. People who need real answers, not advice that could apply to anyone.
We cover both sides - the company you own and the income you personally receive from it. These are separate conversations governed by separate rules, and both need attention.
Our particular focus is on compliance risk, double taxation exposure, and enforcement areas. We map what you actually owe - not just what's easy to see.
Get a clear picture of what applies to your situation before it becomes a compliance problem.
Use these links to go directly to the section that matches your situation. Each guide covers a specific area of obligation without crossing into the others.
See all tax guidesBusiness Taxes
United States
Federal and state tax obligations for foreign-owned companies and non-resident business owners operating in the US market.
Explore US Business Tax GuidesUnited Kingdom
Corporation tax, VAT, and compliance requirements for non-resident directors and foreign companies with UK activity.
Explore UK Business Tax GuidesPersonal Filing
Personal filing requirements, residency tests, and foreign income rules for non-residents with US or UK tax exposure.
Explore Individual Tax GuidesCross-Border & Compliance
International
Double taxation treaties, FATCA, CRS reporting, and the frameworks that govern income earned across multiple countries.
Explore Cross-Border GuidesFiling & Deadlines
Filing deadlines, record-keeping standards, audit risk areas, and what happens when obligations are missed.
Explore Compliance GuidesNot Sure?
Not sure which path applies to you? Describe your situation and we'll point you in the right direction.
Get Personalised GuidanceSelect the profile that best describes you. We'll show you exactly which obligations apply and which guide to start with.
Using Amazon FBA or selling through US-based platforms creates sales tax nexus across multiple states - even if you've never been to the US. Your Stripe and PayPal accounts already report your income through Form 1099, which feeds directly into IRS tracking systems.
Missed foreign-owned entity filings carry automatic IRS penalties - no warnings issued first.
Amazon, Shopify, Stripe and PayPal report your revenue to the IRS automatically each year.
Most exposure can be addressed through correct state registrations and federal compliance filings.
Own a US LLC or corporation but live outside the US? Federal reporting obligations apply whether or not you took any profits. Penalties for missing these can reach $25,000 per filing - and they're routine consequences of common oversights, not rare outcomes.
The $25,000 Form 5472 penalty applies whether your LLC made $0 or $1M. Filing status is what matters.
Wyoming, Delaware, and Florida each carry different annual filing and franchise tax requirements.
The US-UK tax treaty can reduce withholding on FDAP income - but only if you actively file the claim.
The income type matters before anything else - royalties, service fees, and software licensing income are all treated differently by the IRS. A dependent agent - even an exclusive freelancer - can be enough to create a permanent establishment and trigger US tax liability.
A single US-based contractor working exclusively for you can create a taxable permanent establishment.
Royalties, dividends and certain fees face 30% withholding unless a treaty rate is actively claimed.
The US-UK treaty reduces withholding on many income types - but requires an active claim with correct documentation.
For NRPs, the interaction between Pakistani tax residency, UK residency tests, and treaty positions is an area where generic advice consistently falls short. The specifics of your situation determine everything - residency miscalculations are one of the most common and expensive mistakes non-residents make.
The old UK non-dom rules are gone. If your strategy relied on them, your position needs to be reviewed now.
Accidentally crossing the residency threshold in either country triggers tax liability that compounds over time.
Pakistan-UK and Pakistan-US treaties offer double taxation relief - but require proper documentation and active claims.
Being a non-resident director of a UK company carries specific obligations - including personal liability considerations that regularly catch people off guard. HMRC can hold non-resident directors personally responsible for unpaid VAT or PAYE in cases involving fraud or negligence.
HMRC actively pursues non-resident directors for unpaid company tax obligations in negligence cases.
Digital services VAT and marketplace liability rules have shifted. Non-residents need to confirm their own position.
The UK system is more centralised than the US, making compliance more straightforward once obligations are clear.
Not knowing is not a neutral position. Obligations exist whether or not you're aware of them. The IRS and HMRC are using AI-driven data matching between bank records and tax filings - you're being flagged by an algorithm before anyone looks at your file.
FATCA and CRS data matching flags non-compliant accounts automatically. You won't receive a warning first.
The longer an obligation goes unaddressed, the more complex and costly it becomes to resolve.
Most non-residents can get a clear picture of what applies to them within a single consultation.
The most relevant guides for non-residents and foreign business owners. Each one covers a specific area of obligation without crossing into the others.
Foreign-Owned Companies
Own a US LLC or corporation but live outside the US? Federal reporting obligations apply whether or not you took any profits. This guide explains what triggers a filing requirement and what the consequences of missing it look like - including the penalties that apply specifically to foreign-owned entities.
IRS Obligations
The IRS treats income type, residency status, and business activity as separate questions when working out what a non-resident owes. This guide walks through those distinctions so you know exactly where you stand before anything else.
Ecommerce & Sales Tax
Using Amazon FBA or selling through US-based platforms creates sales tax nexus across multiple states - even if you've never been to the US. This guide covers what triggers that exposure, which platforms report your income directly to the IRS, and why it catches so many non-resident sellers off guard.
UK Business Tax
UK customers, employees, or a registered UK address can each start a tax conversation with HMRC. This guide covers when that exposure begins and what it looks like in practice for foreign companies and non-resident business owners.
Director Obligations
Being a non-resident director of a UK company carries specific obligations - including personal liability considerations that regularly catch people off guard. In certain situations involving fraud or negligence, HMRC can hold non-resident directors personally responsible for unpaid VAT or PAYE.
VAT Obligations
UK VAT rules have shifted significantly in recent years, particularly around digital products and low-value imports. Marketplace platforms now carry liability in many situations - but that doesn't automatically clear the underlying seller. This guide explains where responsibility sits and what non-residents need to confirm about their own position.
Comparison Guide
Choosing between a US and UK business structure carries long-term tax consequences. This guide compares both systems side by side using the factors that actually matter to non-residents - complexity, compliance burden, penalties, and enforcement focus.
Treaty & Relief
The US-UK tax treaty is designed to prevent the same income from being taxed twice - but it isn't automatic. A tax treaty is a mandatory disclosure requirement. If you don't actively file the claim with the right documentation, you don't get the benefit. This guide explains how the framework works and what claiming it actually involves.
Residency Tests
Residency determines almost everything in cross-border tax. This guide covers how the US Substantial Presence Test and the UK Statutory Residence Test work, and why a miscalculated day count is one of the most common and expensive mistakes non-residents make.
Our team maps your exact exposure and puts the right compliance structure in place.
The US tax system is one of the most complex in the world for non-residents, and enforcement has become significantly more sophisticated. The IRS and HMRC are now using AI-driven data matching between bank records - fed through FATCA and the Common Reporting Standard - and tax filings. You're not waiting to be reviewed by a human. You're being flagged by an algorithm before anyone looks at your file.
The system runs on two levels - federal and state - and what applies to you depends on how your business is structured, what kind of income you earn, where your customers are, and whether a tax treaty applies. At the federal level, non-residents are generally taxed on two categories of income.
Effectively Connected Income (ECI) is income tied to a US trade or business, taxed at graduated rates. Fixed, Determinable, Annual, or Periodical income (FDAP) - dividends, royalties, certain fees - is taxed at a flat 30% unless a treaty reduces that rate. Identifying which category your income falls into is where every US tax conversation has to start.
State-level obligations add another layer. Every state has its own rules for when a business or individual creates a taxable presence - what's called nexus. For ecommerce sellers using fulfillment networks like Amazon FBA, nexus can be triggered across multiple states without any deliberate action on your part.
Your Stripe and PayPal accounts already report your income through Form 1099, which feeds directly into IRS tracking systems. This isn't future risk - it's happening now, for every year you've been selling.
One thing that consistently surprises non-residents: "no physical office" does not mean no taxable presence. In the digital economy, a dependent agent - even an exclusive freelancer working on your behalf - can be enough to create a permanent establishment and trigger US tax liability. That assumption about physical presence is one of the most costly misconceptions in cross-border tax.
Foreign-owned US companies also carry specific annual reporting requirements. Penalties for missing these can reach $25,000 per filing. These aren't rare outcomes for exceptional cases. They're routine consequences of gaps that most non-residents don't know exist until they're already in them.
We work with non-residents, LLC owners, ecommerce sellers, and NRPs to map US exposure and close filing gaps.
The UK system is more centralised than the US, which makes it more predictable once your obligations are understood - but "more predictable" doesn't mean simpler. The 2025 Foreign Income and Gains (FIG) regime replaced the old non-domicile rules entirely, making this a critical year for any non-resident with a UK connection to review their position.
A foreign company with UK customers, UK employees, or a registered UK address can find itself in a conversation with HMRC - sometimes unexpectedly. UK corporation tax applies to profits arising from UK activities, and "activities" is defined more broadly than most non-residents expect.
The key trigger is whether a company has a permanent establishment in the UK - a fixed place of business, or a dependent agent with authority to contract on the company's behalf. This includes registered offices, warehouses, and in some cases, regularly used co-working spaces or UK-based employees.
UK VAT rules have shifted significantly in recent years, particularly around digital products and low-value imports. The standard threshold is £90,000 in taxable turnover - but non-established businesses supplying digital services to UK consumers may need to register regardless of turnover level.
Being a non-resident director of a UK company carries specific obligations - including personal liability considerations that regularly catch people off guard. In certain situations involving fraud or negligence, HMRC can hold non-resident directors personally responsible for unpaid VAT or PAYE.
The Foreign Income and Gains regime replaced the old non-domicile rules from April 2025. If your tax strategy previously relied on the remittance basis or non-dom status, those rules no longer apply. The FIG regime offers a different framework - but it's not a direct replacement, and the transition has caught many non-residents off guard.
Under the FIG regime, new UK residents can elect to exempt foreign income and gains from UK tax for their first four years of UK tax residence - but only if they were not UK tax resident in any of the prior ten years. After four years, all worldwide income becomes subject to UK tax. The remittance basis no longer exists for new arrivals or those already in transition.
We work with non-resident directors, NRPs, and foreign business owners to map UK exposure and stay ahead of HMRC.
Most non-residents focus on their company and miss their personal obligations entirely - or vice versa. These are governed by separate rules, separate forms, and separate deadlines.
These are not the same conversation. The company you own and the income you personally receive from it are taxed under entirely different rules, filed on different forms, and subject to different enforcement. Both need attention - and missing one while focusing on the other is one of the most common compliance gaps we see.
Applies to the entity itself - LLC, corporation, or UK limited company. Governed by the country where the company operates or has tax presence.
Foreign-owned US entities have federal reporting requirements that apply every year - regardless of revenue, profit, or activity level.
UK companies and foreign companies with UK presence must file corporation tax returns and meet HMRC's reporting requirements.
If your business pays dividends, royalties, or certain fees to non-US or non-UK persons, the company itself may be required to withhold tax at source and remit it - regardless of whether you filed personal returns.
Applies to you personally - salary, dividends, capital gains, and foreign income received from your company or elsewhere.
Non-residents are taxed by the IRS on US-source income. The Substantial Presence Test determines whether you're treated as a resident for tax purposes in a given year.
The UK Statutory Residence Test governs whether you're a UK tax resident in any given year. The number of days spent in the UK, ties to the UK, and your prior residence history all feed into the test.
Accidentally crossing a residency threshold in either country - even by a single day - triggers tax liability as a resident for that entire tax year. This is the most common and expensive individual tax mistake non-residents make.
Key Residency Thresholds at a Glance
183 days using a weighted 3-year formula: current year days + 1/3 of prior year + 1/6 of year before that.
183-day weighted thresholdAutomatic tests, sufficient ties tests, and day-count thresholds that vary based on how many UK ties you hold in a given year.
16-183 days depending on tiesIf both countries claim you as a resident in the same year, tax treaty tie-breaker provisions determine which country has primary taxing rights.
Active claim requiredWe assess business and individual obligations together so nothing falls between the gaps.
The two systems differ significantly in complexity, enforcement focus, and penalty structures. Here's how they compare across the areas that matter most to non-residents.
Single-member LLC treated as disregarded entity by default; C-Corp for investors
Limited company is the standard; branches also possible for foreign entities
Plus state taxes. Pass-through LLCs taxed at individual rates
19% small profits rate (below £50k), 25% main rate above £250k
Form 5472 + pro-forma 1120 for foreign-owned LLCs - no exemption for dormant entities
CT600 required once registered with HMRC; dormant companies have simplified filing
Automatic, no warning. Applies even at zero revenue. Compounds per year missed
Tiered penalty structure starting at £100 for late Self Assessment; escalates with time
Automated cross-referencing of bank data, 1099-K reports, and tax filings. Flags gaps algorithmically
Common Reporting Standard data sharing, compliance checks, and targeted HMRC campaigns
Plus potential underpayment penalties on top of base interest
Interest begins the day after the payment deadline
183-day weighted formula across 3 years. Days are fractionally counted from prior years
Automatic tests + day count thresholds (16-183 days) based on number of UK ties held
FDAP taxed at 30% flat. ECI taxed at graduated rates (10-37%) like a resident
UK-source income taxed at basic (20%), higher (40%), or additional (45%) rate
W-8BEN or Form 8833 required. Must be filed - not automatic. Reduces many rates significantly
Claim made on Self Assessment return. Treaty election must be positively asserted each year
No federal sales tax. Each state sets its own rate (0-13%) and nexus rules independently
Single national rate of 20% (standard). Administered by HMRC centrally. Simpler to manage
Economic nexus thresholds vary by state. FBA inventory can trigger registration in 20+ states simultaneously
No threshold for non-established businesses supplying digital services to UK consumers
Federal + 50 state systems operating independently. Multiple overlapping obligations common
Centralised system is more predictable once obligations are known. Fewer jurisdictions to manage
Federal return + state sales tax filings + state income returns + Form 5472 + more
CT600 + VAT returns (quarterly) + Self Assessment. Fewer moving parts overall
Amazon FBA sellers, businesses needing US banking, investors seeking US market credibility
Services businesses, SaaS with European clients, businesses seeking simpler ongoing compliance
Key Takeaways
The $25,000 Form 5472 penalty is issued without a warning and applies at zero revenue. The US system punishes non-filing more aggressively than the UK does for equivalent gaps.
With a single centralised VAT system and fewer jurisdictions, the UK's ongoing compliance burden is significantly lower than the US - but the 2025 FIG changes mean the individual picture is more complex than it used to be.
Neither the US-UK treaty nor any other double taxation agreement is applied automatically. You must file the correct claim with the correct documentation in the correct year - or you don't get the benefit.
We map both systems against your specific business model and income type before recommending anything.
These guides are structured to give you a clear picture of what applies to your situation - without requiring you to read everything. Start with the right guide and work from there.
Before reading any specific guide, establish which tax system is actually relevant to your situation. The answer isn't always obvious - UK customers, a US LLC, or even a US payment processor can each create obligations you may not have expected.
If you're not sure, start with the US vs UK Comparison or the Situation Selector at the top of this page. Both are designed to help you identify your starting point quickly.
Your company's tax obligations and your personal tax obligations are governed by entirely different rules. Read the business section for your jurisdiction first, then check the individual section. Don't assume that one covers the other - it never does.
If you own a US LLC and personally receive income from it, you likely have both Form 5472 obligations (business) and 1040-NR filing obligations (personal) - and they're tracked separately by the IRS.
Once you know what applies, check when it's due. US and UK deadlines don't align, and missing one while focusing on the other is a common and expensive mistake. Many penalties - particularly IRS penalties for foreign-owned entities - are issued automatically the day after a deadline is missed, with no grace period and no warning.
Use the FAQ section to find key deadlines relevant to your situation quickly.
Work through the relevant guide sections and flag anything you're not certain has been handled. A gap doesn't have to be large to be significant - a single missed Form 5472 carries a $25,000 penalty, and a missed UK VAT registration can result in backdated assessments from HMRC.
Be honest about what you don't know. The guides are designed to surface the gaps most people don't realise they have - not just the obvious ones.
Once you've read the relevant sections and identified what may be outstanding, a single consultation is usually enough to establish your full compliance position and outline what needs to be filed, in what order, and by when.
We work specifically with non-residents, NRPs, and foreign business owners. We don't need you to be an expert before you contact us - that's our job.
Quick Reference - Jump to Any Section
One consultation is usually enough to map your full compliance position and outline what needs to happen.
Tax penalties don't pause while you figure things out. Every year a filing is missed, the exposure grows - and in some cases, so does the penalty itself. A single conversation is usually enough to establish where you stand and what needs to happen next.
The questions we hear most from non-residents, foreign LLC owners, NRPs, and cross-border businesses. Select a category to filter.
Yes. If your LLC is foreign-owned, Form 5472 must be filed annually regardless of whether the company had any revenue, profit, or activity. The IRS does not exempt dormant or zero-revenue entities from this requirement.
A pro-forma Form 1120 must also be filed alongside Form 5472 for single-member foreign-owned LLCs. The penalty for missing either is $25,000 per filing - applied automatically, with no grace period and no warnings issued in advance.
Yes. Physical presence in the US is not required for IRS tax obligations to apply. Several situations create US tax exposure for non-residents who have never set foot in the country:
Payment platforms including Stripe, PayPal, and Amazon already report your income to the IRS via Form 1099-K. FATCA and CRS share that data internationally. The IRS knows about the income before you file anything.
Yes, and usually across multiple states at once. When you use Amazon FBA, your inventory is physically distributed across Amazon fulfilment centres in various US states. That physical presence creates nexus - a taxable presence - in each of those states, triggering potential sales tax registration requirements.
In most states, Amazon collects and remits sales tax on your behalf as a marketplace facilitator. However, this does not necessarily eliminate your own registration or income reporting obligations in those states. Wyoming, Delaware, and Florida each have different rules, and your formation state matters.
Form 5472 is an IRS information return required for US corporations with 25% or more foreign ownership, and for foreign-owned single-member LLCs. It reports transactions between the US entity and its foreign owners or related foreign parties.
Who must file: Any single-member LLC owned by a non-US person or entity, and any US corporation that is 25%+ foreign-owned. The form is filed annually with a pro-forma Form 1120. Missing this filing carries a $25,000 penalty per return, applied regardless of the company's revenue or activity level.
The US-UK tax treaty exists to prevent double taxation - but it is not applied automatically. You must actively claim treaty benefits by filing the correct documentation in the correct year. If you do not file the claim, you do not receive the protection.
For US purposes, this typically means submitting a W-8BEN or Form 8833. For UK purposes, the claim is made on your Self Assessment return. Treaty benefits can significantly reduce withholding rates on dividends, interest, and royalties - but only for those who properly assert them.
Your UK limited company has its own obligations regardless of where you personally live. These include filing a corporation tax return (CT600) annually, paying corporation tax on UK profits, submitting accounts to Companies House, and filing a confirmation statement each year.
As a non-resident director, you may also have personal UK tax obligations if you receive salary, dividends, or other UK-source income from the company. PAYE applies to director compensation even when the director is based abroad. Personal liability can also arise in cases of negligence or fraud involving unpaid PAYE or VAT.
Potentially yes, with no turnover threshold. The standard UK VAT registration threshold of £90,000 applies to UK-established businesses. For non-established businesses supplying digital services - such as software, online courses, or subscriptions - to UK consumers, HMRC requires VAT registration regardless of the value of sales.
This means even a small volume of digital sales to UK customers can trigger a registration requirement. Once registered, quarterly VAT returns must be filed and VAT collected at 20% must be remitted to HMRC. Failure to register when required leads to backdated assessments plus interest and penalties.
From April 2025, the old non-domicile rules and the remittance basis of taxation were abolished entirely. They were replaced by the Foreign Income and Gains (FIG) regime.
If your tax strategy previously relied on the remittance basis or non-dom status, those protections no longer exist and your position needs to be reassessed under the new framework.
The UK Statutory Residence Test does not set a single fixed day limit - the threshold depends on how many UK ties you hold in a given year. Ties include having a UK home, working in the UK, having a UK-resident close family member, or having spent 90+ days in the UK in either of the two previous years.
A single miscalculated year can result in full UK resident tax treatment on worldwide income for that entire tax year. Day counts matter enormously.
Yes - and it happens more often than people expect. Both countries apply their own residency tests independently, and it is possible to meet the criteria for both in the same tax year. When this happens, the US-UK tax treaty contains tie-breaker provisions designed to determine which country has primary taxing rights.
The tie-breaker rules look at factors including where you have a permanent home, where your personal and economic ties are strongest, and your habitual place of abode. This is not a simple test - and if you find yourself in dual residency, claiming the treaty tie-breaker protection requires the correct documentation filed in both countries.
FATCA (Foreign Account Tax Compliance Act) is a US law that requires foreign financial institutions - banks, brokers, and payment processors worldwide - to report financial account information belonging to US persons or US-connected entities directly to the IRS.
For non-residents, the practical effect is that your bank accounts, investment accounts, and payment processor balances are reported to the IRS even if you have never filed a US tax return. Combined with the Common Reporting Standard (CRS), which operates similarly across 100+ countries including the UK, tax authorities now have access to cross-border financial data automatically. This is why non-compliance is increasingly difficult to sustain undetected.
The right answer depends on your specific business model, where your customers are, which platforms you use, and your personal tax residency. There is no universally correct answer - both structures have genuine advantages and disadvantages for non-residents.
The comparison also changes significantly if you plan to bring in investment, employ staff, or eventually sell the business. This decision benefits from a proper structure review before incorporation - it is very difficult to undo once established.
Extensions give more time to file but not more time to pay. Tax owed is still due by the original deadline regardless of any extension filed.
UK late filing penalties begin at £100 immediately after the deadline - they do not require multiple missed deadlines to escalate. Interest accrues on unpaid tax from the day after the payment deadline.
Multi-year gaps are common and resolvable - but the approach matters significantly. Filing late returns proactively, before being contacted by a tax authority, generally results in far better outcomes than waiting to be caught.
For the US, the IRS Streamlined Filing Compliance Procedures exist specifically for non-residents with inadvertent filing failures. This programme allows eligible taxpayers to catch up on missed returns with reduced penalties. For the UK, voluntary disclosure to HMRC is also looked upon more favourably than a compliance investigation. The key is to act before the authority acts first. We can help you map what's outstanding and manage the catch-up process.
We answer non-resident tax questions every day. Reach out directly and we'll point you in the right direction.
One conversation is usually enough to establish your full compliance position, identify what's outstanding, and put a clear plan in place. Choose the option that suits you best.