The $25,000 form a UK founder owes the IRS every year

A US limited liability company with one owner is, by default, a disregarded entity for US federal tax purposes. It files no income tax return of its own.

That is where British owners get the wrong idea. Since the rules on foreign-owned disregarded entities were tightened, the IRS has required these companies to file a pro forma Form 1120 with Form 5472 attached.

The deadline is the due date of that Form 1120, including extensions. For a company on the calendar year, that means mid-April unless an extension is requested.

Form 5472 calculates no tax. It reports transactions between the company and its owner: capital introduced, money withdrawn, loans in either direction, payments for services.

The IRS instructions set the penalty for a return not filed when due at 25,000 dollars. A substantially incomplete return counts as not filed, and the same penalty covers a failure to keep the records the regulations require.

No reminder arrives. Companies House writes to directors and HMRC letters carry dates; a US LLC owned from Manchester or Leeds gets no equivalent prompt.

The rest of the year is lighter. At formation, articles go to the chosen state, a registered agent is appointed to receive official mail there, and a US business address is arranged.

Wyoming is a common choice for owners abroad. It levies no state income tax and does not require members' names in its articles of organisation.

The Employer Identification Number is the next bottleneck. The IRS online application is open only where the responsible party holds a Social Security Number or an ITIN and the principal place of business is in the US.

Everyone else applies by phone, fax or post on Form SS-4, which takes considerably longer. Banks and payment platforms ask for the EIN letter before they ask for anything else, so the application is worth starting on day one.

Through the year, the job is a ledger. Every movement of money between founder and company is a potential Form 5472 entry, and rebuilding those entries in March out of mixed accounts is how incomplete returns happen.

Two more dates sit outside the IRS calendar: the state annual report and the registered agent renewal, both set by the state and the agent. They are modest, and a lapse can cost the company its good standing.

Changes of mailing address, business location or responsible party go to the IRS on Form 8822-B. A change of responsible party must be reported within 60 days.

Owning the LLC does not move anyone's tax residence. A UK resident stays a UK resident, and how HMRC treats the profits, with any relief for tax paid elsewhere, depends on the facts and on an adviser who works across both systems.

The practical test is whether the American company earns its keep. It does when the customers, platforms or payment rails the business runs on are American; it is cost and paperwork when the revenue is British or European.

Write the dates down on the day the company is formed. The founders who come unstuck are not usually the ones who misread the rules, but the ones who read a quiet inbox as a sign that nothing was due.