Tax help for cross-border business owners and freelancers

Your situation

You work for yourself across a border — a freelancer in London with US citizenship, a consultant in Manchester invoicing US clients through an LLC set up years ago, a founder with a limited company and an American passport. The business is usually the easy part. The structure it sits in is where cross-border tax gets expensive, because the US and the UK frequently refuse to see the same entity the same way.

What each country expects from you

The United States expects citizens and residents to report business income worldwide — and sets the self-employment filing trigger at just $400 of net earnings. Self-employment tax applies unless the US–UK totalization agreement assigns your social security to the UK, evidenced by a certificate of coverage. Own a foreign company, and annual US information reporting arrives with it, along with anti-deferral rules that can tax undistributed profits.

The United Kingdom taxes residents on worldwide business profits. Sole traders register with HMRC and file Self Assessment — register by 5 October after the tax year, file online by 31 January — paying income tax and National Insurance. A UK company pays corporation tax, and its owner is taxed again on salary and dividends taken out. US-source business income may also face US withholding unless treaty positions are claimed.

The classic traps

• The US LLC held by a UK resident. The classic mismatch: transparent to the IRS, potentially opaque to HMRC, with double taxation in the gap. See US LLCs for UK residents.
• The UK limited company with a US owner. Corporate reporting on the US side is heavy, and anti-deferral rules can reach profits left in the company — the salary–dividend mix that suits a purely British owner rarely suits an American one.
• Paying social security twice. Without a certificate of coverage under the totalization agreement, US self-employment tax and UK National Insurance can both be charged on the same profits.
• Mismatched years and accounts. UK accounting periods, the 6 April–5 April tax year and the US calendar year all disagree; profits have to be restated, in dollars, without dropping or doubling anything.
• The forgotten flanks. UK VAT registration and US state-level obligations sit outside both income tax systems, and are missed precisely because each country's adviser assumes the other is watching them.

One firm, both returns

Entity problems cannot be solved from one side. We prepare the US returns and the UK filings together, so the choice of structure, the way you pay yourself, and the treaty and totalization positions are decided once and reflected consistently everywhere. If the structure you have is fighting you, we will say so plainly — with fixed fees agreed before any work begins.

When to get advice

Before you form anything is the golden moment: an hour of structuring advice beats years of workaround filings. It matters again before taking on US clients or investors, before moving countries with an existing business, and before extracting significant profits. If the structure already exists and the filings feel off, a consultation will establish quickly whether you have a paperwork problem or a design problem.