No US tax at entity level does not mean no tax. Your customers decide which payment rails you need; where you live decides what the pass-through actually costs. Set both below.
A private company limited by shares, registered at Companies House: £100 online, live within 24 hours, no notary, no minimum capital, no local director, no mandated accountant. More than 500,000 are formed each year and a substantial share are owned by non-residents.
The fee was £12 until 1 May 2024, when Companies House quadrupled it to £50, and it doubled again to £100 on 1 February 2026, most comparisons still quote the old number. The confirmation statement also rose to £34. Budget £200–1,000 a year all in for a lightly trading company.
Corporation tax is 25% above £250,000, 19% up to £50,000, with marginal relief between, charged on all profit whether retained or distributed. A CT600 is due annually with payment nine months and a day after year end. Dividends to non-resident shareholders suffer no UK withholding; UK-resident shareholders pay 10.75% to 39.35% above a £500 allowance. VAT registration is mandatory above £90,000.
A state-law entity, most often formed in Wyoming, Delaware, New Mexico or Florida, combining corporate limited liability with partnership tax treatment. By default a single-member LLC owned by a foreign person is a disregarded entity, invisible to the IRS as a taxpayer, and a multi-member LLC is a partnership. Both are pass-throughs.
The draw is the package: US banking through Mercury, Relay or Brex; US payment rails through Stripe, PayPal and Shopify Payments; American brand credibility with enterprise buyers; and potentially no federal tax. Federal tax applies only to effectively connected income, so an owner abroad serving non-US clients with no US office or employees typically has none.
The obligations are administrative but unforgiving. An EIN takes four to eight weeks by fax without an SSN. Form 5472 plus a pro-forma Form 1120 must be filed annually regardless of activity, at $25,000 per missed form per year. Wyoming costs $102 to form and $60 a year; Delaware $110 plus $400 annual tax.
Let the payment rails decide, not the tax rate.
If your revenue depends on Stripe US, Shopify Payments or American enterprise procurement, a Wyoming or Delaware LLC wins despite the IRS paperwork, no UK entity substitutes for a US merchant account. If you invoice European or global clients, the UK Ltd is cheaper, simpler and files nothing to a foreign revenue service.
The pass-through's headline 0% should not settle it. That figure describes the US federal position only, and for most founders the real bill is set by their own country of residence. Many eventually run both: a UK Ltd operating company with a US LLC as the American invoicing entity.
The single most expensive mistake in this comparison, and it catches people who owe no US tax at all.
Opaque versus transparent classification is the difference between a clean pass-through and being taxed twice on the same profit.
