US UK Accountant for Small Business Owners on Green Cards
A US UK accountant for small business owners for Green Card holders in the UK: company filings, Form 5471, salary vs dividend and FBAR. Book a consultation.
A company and its owner, filed together
A Green Card holder running an incorporated UK business carries two separate compliance stacks that must be reconciled every year: the limited company's own Companies House and HMRC filings, and the owner's personal returns to both HMRC and the IRS. A US UK accountant for small business owners for Green Card holders in the UK exists to make those two stacks agree — because incorporation, not trading, is what triggers controlled foreign corporation reporting.
Why is an incorporated business a different problem from freelancing?
Most cross-border guidance written for Americans in Britain quietly assumes a sole trader. That reader has one entity — themselves. They file a UK Self Assessment return, a US Form 1040 with a Schedule C, claim foreign tax credits, and the two systems look at the same pot of profit from slightly different angles. It is untidy, but it is a single conversation.
The moment you incorporate, you create a second person in the eyes of both tax authorities, and the two authorities disagree about what that person is. HMRC sees a UK-resident company: separate legal personality, its own corporation tax charge, its own statutory accounts, its own filing calendar at Companies House. The IRS sees a foreign corporation — and because you are a US person holding more than half of it, it sees a controlled foreign corporation, an entity whose retained profits it may tax to you personally whether or not a penny leaves the company.
That single divergence is what generates almost every problem we are asked to fix. The company's UK accounts are prepared to UK GAAP by a UK accountant who has no reason to think about Subpart F. The owner's US return is prepared by a US preparer who has never seen a CT600. Nobody owns the join. Two years later a Form 5471 has never been filed, the statute of limitations on the entire US return has never started running, and the business bank account has never appeared on an FBAR.
What "Green Card holder" changes specifically
A lawful permanent resident is taxed by the United States exactly as a citizen is: on worldwide income, every year, regardless of where they live or how long they have been away. Three consequences matter for a business owner in Britain.
- The obligation does not pause. Living in the UK does not suspend US filing. It changes the deadline and the credits available, nothing more.
- Immigration and tax interact. Green Card holders periodically need to demonstrate a clean US filing history. A gap in returns, or an unfiled FBAR, is an awkward document to explain at exactly the wrong moment.
- Surrendering the card has a tax event attached. A long-term resident — broadly, someone who has held a Green Card in at least eight of the last fifteen tax years — who abandons it can fall within the expatriation rules, where the value of a private UK trading company is precisely the asset that causes trouble. That is a reason to keep the company's US-side records clean from year one, not from the year you decide to leave.
The full filing map: company and owner, UK and US
The best mental model is a grid. Two filers (the company, you) multiplied by two revenue authorities. Everything below sits in one of the four boxes, and the failures we are engaged to remediate almost always sit in the two boxes nobody was watching.
| Filer | UK / HMRC & Companies House | US / IRS & FinCEN |
|---|---|---|
| The limited company | Statutory accounts to Companies House; Company Tax Return (CT600) with HMRC; confirmation statement; PAYE Real Time Information filings if it runs payroll; VAT returns if registered; PSC register maintenance | No US return of its own — but its full income statement, balance sheet, earnings and profits, and related-party transactions are reported through you on Form 5471 |
| You, the owner-director | Self Assessment return reporting salary, dividends, benefits in kind, director's loan interest and any other UK income | Form 1040 with worldwide income; Form 5471; the NCTI (formerly GILTI) computation forms; Form 1116 for foreign tax credits; FinCEN Form 114 (FBAR); Form 8938 if thresholds are met |
The UK side, in order
UK company compliance is deadline-driven and unforgiving, and the deadlines are not the same date. Statutory accounts are due at Companies House nine months after the financial year end. Corporation tax is payable nine months and one day after the end of the accounting period. The Company Tax Return itself is not due until twelve months after the period end — which is the trap: the money is due three months before the return that calculates it. Owners who wait for their accountant to finish the CT600 before paying have already accrued interest.
Alongside these sit the confirmation statement, PAYE Real Time Information submissions on or before each payment of salary, and — since the Companies House identity verification regime came into force — director identity requirements that overseas and dual-resident directors have found materially more demanding than the old regime. Our UK tax services team runs this calendar as a single engagement rather than as isolated filings, because the numbers that go into the accounts are the same numbers that will later have to be restated for the IRS.
The US side, in order
Your personal Form 1040 is due 15 April, with an automatic extension to 15 June for taxpayers whose tax home is abroad, and a further extension available to 15 October. Form 5471 is not a standalone filing — it attaches to the 1040 and inherits its deadline, which is why an unextended, unfiled 5471 travels quietly with an unfiled return.
The FBAR runs on its own track: FinCEN Form 114, filed electronically through the BSA system, due 15 April with an automatic extension to 15 October that you do not have to request. Form 8938, by contrast, attaches to the 1040 and has substantially higher thresholds for taxpayers living abroad.
What incorporation triggers: controlled foreign corporation reporting
A UK limited company is a foreign corporation for US purposes. It becomes a controlled foreign corporation when US shareholders who each hold at least 10% together hold more than 50% of the vote or value. A single Green Card holder owning the whole of a UK trading company therefore creates a CFC on their own, on day one, without any election or filing being made.
Form 5471 and why it is not "just an information return"
Form 5471 reports the company's ownership structure, income statement, balance sheet, earnings and profits, and transactions between the company and its related parties — effectively translating your UK statutory accounts into US tax language. The IRS guidance on Form 5471 sets out the filer categories; most owner-managers file as a Category 4 and Category 5 filer, and as a Category 3 filer in the year the company is formed or shares are acquired.
The penalty regime is what makes this the highest-consequence form in the package. A failure to file carries a penalty per form, per year, regardless of whether any US tax was due, with continuation penalties once the IRS issues notice. Worse, an incomplete or unfiled Form 5471 can prevent the statute of limitations on your entire return from ever starting. A 2019 return with no 5471 attached is not closed in 2026; it is open indefinitely. We cover the categories and penalty mechanics in depth across our guides library.
NCTI: what changed for 2026
The regime long known as GILTI requires a 10% US shareholder to include a share of the company's active profits in personal income annually, distribution or no distribution. For tax years beginning after 31 December 2025 it has been renamed net CFC tested income (NCTI), and three mechanical changes matter to owner-managers:
- The section 250 deduction reduced from 50% to 40%, raising the effective corporate-path rate from roughly 10.5% to roughly 12.6%.
- The deemed-paid foreign tax credit haircut narrowed, so a larger proportion of the underlying UK corporation tax is now creditable.
- The net deemed tangible income return based on qualified business asset investment was removed, so tested income is no longer reduced by a return on the company's tangible assets. Asset-light UK service and consultancy companies were never sheltered by this in practice, but capital-heavy businesses lose a genuine offset.
Two elections usually do the real work. The high-tax exclusion removes tested income taxed abroad above a threshold set by reference to the US corporate rate; with UK corporation tax at 19% on small profits, rising through marginal relief to 25% at the main rate, most profitable UK companies clear that bar comfortably. Where they do not — a company sheltered by losses, or by generous R&D or capital allowances claims that push the effective UK rate down — a section 962 election, which taxes the inclusion at corporate rates with a deemed-paid credit, is the usual alternative. Neither election is automatic and neither is set-and-forget; the right answer moves with the company's effective UK rate each year, which is exactly why the UK computation and the US computation must be prepared by people who talk to each other.
Should you take salary or dividends from a UK company?
Every UK owner-manager is told to think about the salary-dividend mix. For a Green Card holder the standard UK analysis is roughly half the picture, and following it blindly produces the wrong answer.
| Extraction route | UK treatment | US treatment |
|---|---|---|
| Salary | Deductible against corporation tax; subject to income tax and to employee and employer National Insurance; reported through PAYE RTI | Earned income on the 1040. Can be sheltered by the foreign earned income exclusion up to the annual cap, or relieved by foreign tax credits. Not self-employment income, and the US–UK totalization agreement prevents duplicate social security charges |
| Dividend | Paid from post-tax profits, so no corporation tax deduction; no National Insurance; taxed at dividend rates, which increased by two percentage points at the ordinary and upper rates from 6 April 2026 | Passive income. Cannot be sheltered by the foreign earned income exclusion. Relieved by foreign tax credits in the passive basket, and potentially eligible for qualified dividend rates under the US–UK treaty. Exposed to the 3.8% net investment income tax, against which foreign tax credits are not available |
| Retained profit | Taxed once at corporation tax; nothing further until extraction | Not necessarily deferred. Potentially picked up currently as an NCTI inclusion or as Subpart F income, so "leave it in the company" is not a US deferral strategy the way it is a UK one |
Three interactions are consistently mishandled. First, the 3.8% net investment income tax on dividends is a genuine unrelieved cost: the treaty does not eliminate it and foreign tax credits do not offset it, so a dividend-heavy extraction policy quietly imports a US charge that has no UK equivalent. Second, salary reduces UK taxable profit and therefore reduces the company's effective UK rate — which can, at the margin, push the company below the high-tax exclusion threshold and pull retained profits back into current US income. A decision made purely to save employer National Insurance can cost more in US tax than it saves. Third, the two tax years do not align: the UK year ends 5 April, the US year ends 31 December, and a dividend declared in February sits in different tax years in the two countries, which materially affects whether a foreign tax credit is available in the year you need it.
Director's loans and benefits in kind
Owner-managers routinely run a director's loan account, and the UK rules around it are well understood: a corporation tax charge on loans outstanding beyond the deadline, a benefit-in-kind charge on cheap or interest-free borrowing, and relief on repayment. The US analysis is separate and less forgiving. A loan from a CFC to its US shareholder can be treated as an investment in US property and taxed as a deemed distribution. An informal drawing that the UK side books as a loan and cleans up at year end may already have created a US income inclusion. This is one of the clearest examples of why a UK-only accountant, however competent, cannot safely run this engagement alone — and why we integrate it with cross-border tax planning rather than treating it as bookkeeping.
Which business bank accounts must go on an FBAR?
The FBAR is where incorporated owners most often discover an unfiled form. The threshold is an aggregate one: if the combined maximum value of all your foreign financial accounts exceeds US$10,000 at any point in the calendar year, every account is reportable — not only the ones over the threshold.
Two rules bring the company's accounts into your personal aggregate:
- Financial interest through ownership. A US person who owns directly or indirectly more than 50% of the voting power or value of a corporation is treated as having a financial interest in that corporation's foreign accounts. As the majority owner of your UK company, its business current account, deposit account, merchant acquiring balances and any foreign-currency accounts are yours to report.
- Signature authority. Even without majority ownership, a director or authorised signatory who can direct the disposition of funds has signature authority and a filing obligation in their own right.
The practical effect is that a modest UK business easily produces an FBAR with six or eight accounts on it: personal current and savings accounts, an ISA held in cash, a UK pension where the arrangement makes it reportable, the company current account, a corporation tax reserve account, a payment-processor balance, and a business savings account. Each has a maximum-value figure for the year, in dollars at the prescribed year-end rate. Where accounts have gone unreported, our FBAR penalty calculator gives an indication of exposure before you speak to anyone.
Form 8938 is a separate filing with its own, much higher thresholds for taxpayers living abroad, and — critically — your stock in the UK limited company is itself a specified foreign financial asset. The company's value belongs on the 8938 even though the company is not a bank account.
What if the US filings were never made at all?
The common presentation is not defiance. It is a founder who incorporated in Britain, engaged a good UK accountant who filed everything HMRC and Companies House asked for, and had no reason to know that incorporating had created a US reporting entity. Several years later a bank, a mortgage lender or a US preparer asks a question and the gap appears.
Where the failure to file was non-wilful, the IRS Streamlined Foreign Offshore Procedures are the usual route: amended or delinquent returns for the most recent three years, FBARs for the most recent six, and a signed non-wilfulness certification, with the miscellaneous offshore penalty waived for taxpayers who meet the non-residency requirement. Missing Forms 5471 are filed with those returns. Where income was correctly reported and only information returns were missed, the IRS also operates delinquent international information return submission procedures, under which the returns are filed with a reasonable-cause statement.
Choosing between them is a judgement, not a form-filling exercise, and the choice is materially harder when a company is involved because the earnings and profits history has to be rebuilt for every open year before the returns can be prepared. Our IRS streamlined filing team reconstructs that history from the UK statutory accounts rather than starting from scratch, which is both faster and more defensible.
How the engagement should actually be run
The structural fix is sequencing. UK statutory accounts are finalised first, because they are the source data for everything downstream. Those figures are then restated to US tax principles — functional currency, earnings and profits, depreciation differences, accruals the IRS does not recognise — and that restatement drives the Form 5471 schedules and the NCTI computation. The extraction decision for the following year is made with both sets of numbers on the table, before the payroll and dividend decisions are locked in, not afterwards.
Practically, that means one adviser holding the whole picture, or two advisers with an explicit protocol between them. A year-end reconciliation memorandum, prepared once and reused, is worth more than any single filing: it records why the effective UK rate was what it was, which elections were made and why, how the loan account was characterised, and which accounts went on the FBAR. It is the document that turns a future IRS enquiry from an excavation into a conversation. Our US tax services and UK teams sit in the same practice for exactly this reason.
The reader who benefits most from this is not the one in trouble. It is the founder in year one or year two, whose company is small, whose earnings and profits history is three pages long, and for whom getting the structure right costs a fraction of what unwinding it will. Jungle Tax prepares both sides of this file as a single engagement.
If you hold a Green Card and run an incorporated business in the United Kingdom — whether your US filings are current, several years behind, or you have simply never been certain what the company creates on the American side — contact our cross-border team for a confidential consultation. We will map your company and personal filings across both countries, identify what is missing, and tell you plainly what remediation would involve before you commit to anything.
