You missed one step.
Itch.io requires you to fill in a tax interview. They charge a fee of $3 (the company who handles the interview) which will be deducted from your first payment. Based on this tax interview, you will be given a withholding tax rate. If the UK has a treaty with the USA (which it does) there shouldn't be any withholding tax. In this case, it's up to you to declare the amount on your tax return.
PayPal does not charge me to withdraw the money into my bank account - but my bank does. I'm in South Africa, but I'm going to guess you'll have the same situation. If you use the PayPal funds to buy stuff, rather than transferring it into your bank account, you won't pay any further fees.
You don't need to trade through a company though, you can trade under your own name. Any income will then be added to your other earnings and taxed at your marginal rate - but you probably can deduct your expenses incurred in writing the games from your income (like your computer costs, software etc).