Finance Outsourcing
Form 5472, Form 5471, Form W-8BEN, Form W-8BEN-E
A finance function for businesses operating in both countries: month-end close, intercompany accounting, VAT, US filings and one calendar.
What does Finance Outsourcing involve?
Small cross-border groups often have a bookkeeper in one country and an accountant in the other, and nobody responsible for the join between them. We take on the recurring finance work for both entities, so intercompany balances agree, deadlines are tracked in one place and the tax returns start from reconciled figures.
Forms and filings involved
- Form 5472
Reporting for US corporations with a significant foreign owner, and for single-member US LLCs owned by someone outside the US.
- Form 5471
The information return a US citizen or green card holder files for a UK limited company they own, control or have acquired an interest in.
- Form W-8BEN
The certificate a non-US individual gives a US payer to confirm foreign status and claim treaty-reduced withholding on US income.
- Form W-8BEN-E
The certificate a non-US entity gives a US payer to confirm its foreign status, FATCA classification and any treaty claim.
Running the finance function across two entities
Most of the risk sits between the entities rather than inside them.
A UK parent recharges staff costs to its US subsidiary, the subsidiary pays a licence fee back, and cash moves in both directions. If each side records these on different dates or at different exchange rates, the balances stop agreeing and nobody notices until year end. We close both ledgers on the same timetable each month and clear intercompany differences before they carry forward.
Intercompany charges also need a basis both tax authorities will accept. The US applies arm's length rules to transactions between related parties whatever the group's size, while UK transfer pricing rules exempt many small and medium-sized groups, subject to exceptions. A charge that suits the UK accounts can therefore still need support on the US side. We document how each recurring charge is calculated and keep it consistent with the figures reported on Form 5472.
The recurring compliance sits in one calendar: UK VAT returns, PAYE submissions, corporation tax instalments where they apply, US payroll filings, state returns and information returns. A US business paying non-US contractors collects Form W-8BEN or W-8BEN-E from them before payment, while US contractors provide Form W-9. We hold the documents, track the dates and report to the directors each month on what has been filed and what is next.
Recurring work we take off your hands
- 01
- Month-end close for the UK and US entities on one timetable
- 02
- Intercompany balances reconciled and cleared in the same currency each month
- 03
- UK VAT, PAYE and US payroll filings run from one compliance calendar
- 04
- Contractor tax forms collected before the first payment is made
- 05
- Board reporting in sterling and dollars drawn from the same numbers
Who this is for
UK groups with a young US subsidiary and no US finance staff
- US businesses with a UK entity run by a small local team
- Founders currently running the finance function themselves in two countries
- Groups whose intercompany balances have not agreed for some time
Why US UK Tax Returns
Each return is prepared with the other country's return open beside it, so a credit, election or disclosure on one is supported by the other.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
We only have a handful of staff in each country. Do we really need transfer pricing?
In the US, yes in principle. Related-party transactions are expected to be priced at arm's length regardless of the group's size, and the amounts appear on Form 5472 where the US company is foreign-owned. The UK exempts many small and medium-sized groups from its own rules. Documentation can be proportionate for a small group, but the method should be written down and applied consistently from year to year.
Our US company pays freelancers in the UK. What forms do we need from them?
Generally a Form W-8BEN from an individual or a Form W-8BEN-E from a company, collected before payment and kept on file. It establishes that the payee is not a US person. Payments for services performed outside the US are generally not US-source income, so no US withholding or information return is normally required. The form is not sent to the IRS. A contractor who is a US person provides Form W-9 instead.
What happens to intercompany balances that have not agreed for years?
They are rebuilt from the transaction records on both sides, usually starting from the last point at which they agreed. Differences typically come from timing, exchange rates and payments booked to the wrong entity. Once the cause of each difference is found, adjusting entries are posted in both ledgers. Where earlier tax returns or Form 5472 figures relied on the wrong balances, amendments may be needed, depending on the size of the error.
Primary sources
What this page says is drawn from the official material below. Read it yourself; we would rather be checked than trusted.
Last reviewed
From the Blog
Ready to talk it through?
Tell us where you live, what you hold and which years are outstanding. We will say what applies and what it involves before any work begins.
Contact us