By
August 11, 2026
Does a UK Company Charge VAT on International Services?
A UK company does not always charge UK VAT on international services.
Whether UK VAT applies depends mainly on the place of supply of the service. This is determined using UK VAT rules and can depend on:
For many services supplied by a UK company to an overseas business, the general rule places the supply where the business customer belongs. If that is outside the UK, UK VAT will generally not be charged.
However, there are important exceptions, particularly for certain property-related services, events, transport and other specialist services.
The key principle is:
International customer does not automatically mean no UK VAT.
The correct place of supply must be established first.
When a UK company supplies services internationally, start with three questions:
1. Is the customer a business or consumer?
2. Where does the customer belong?
3. What type of service is being supplied?
The answers determine which VAT place-of-supply rule applies.
A useful process is:
Identify customer
↓
Determine B2B or B2C
↓
Identify exact service
↓
Apply place-of-supply rule
↓
Determine whether UK VAT applies
This is more accurate than simply looking at the customer's billing address.
The place of supply determines where a service is treated as supplied for VAT purposes.
If the place of supply is:
UK → UK VAT may apply
If the place of supply is:
Outside UK → UK VAT will generally not apply
However, the supplier or customer may have VAT, GST, sales-tax or similar obligations in the country where the service is treated as supplied.
For many business-to-business (B2B) services, the general rule is that the place of supply is where the business customer belongs.
For example:
UK company
↓
Provides consulting
↓
Customer is a US business
↓
Customer belongs in USA
↓
Place of supply generally USA
↓
UK VAT generally not charged
The service would normally be treated as outside the scope of UK VAT, assuming the general B2B rule applies.
Suppose a UK VAT-registered company provides £5,000 of management consulting to a business in New York.
If the general B2B place-of-supply rule applies:
Consulting fee: £5,000
UK VAT: £0
Invoice total: £5,000
The reason VAT is not charged is not because the service is zero-rated.
Instead, the place of supply is outside the UK.
This distinction matters for VAT accounting.
For many ordinary B2B services, UK VAT will generally not be charged where the EU business customer belongs outside the UK.
For example:
UK company → French business
If the general B2B rule applies:
Place of supply → France
Therefore:
UK VAT → generally not charged
The French business may instead need to account for VAT under the applicable reverse-charge mechanism.
The reverse charge is a mechanism under which the customer accounts for VAT rather than the overseas supplier charging local VAT in the usual way.
A simplified international B2B transaction might look like:
UK supplier
↓
Provides service to EU business
↓
No UK VAT charged
↓
EU business accounts for local VAT where required
The precise rules depend on the country and service.
No.
These concepts should not be confused.
The transaction is a taxable UK supply, but VAT applies at 0%.
The place of supply is outside the UK, so the transaction is not subject to UK VAT.
The customer may be responsible for accounting for VAT in its own jurisdiction.
All three situations might result in £0 UK VAT being added to the invoice, but the tax treatment is different.
You should obtain reasonable evidence that the customer is acting as a business.
Depending on the customer and country, evidence might include:
An overseas customer does not necessarily need a VAT number to qualify as a business.
For example, US companies do not normally operate using EU-style VAT numbers.
The absence of a VAT number does not automatically make the customer a consumer.
You should consider other evidence demonstrating that the customer is engaged in business activity.
This can be particularly relevant when dealing with businesses in countries that do not operate VAT systems similar to the UK's.
Sometimes.
The general rule for many business-to-consumer (B2C) services is different from the B2B rule.
For many B2C services, the general place of supply is where the supplier belongs.
Therefore, where the supplier is a UK company, UK VAT can potentially apply.
However, there are important exceptions.
Certain services supplied to consumers outside the UK can have their place of supply where the overseas customer belongs.
The exact type of service therefore matters.
Suppose a UK company provides a service to an individual living in California.
You should not automatically assume:
US customer = no UK VAT
Instead, determine exactly what service is being supplied.
If the service falls within one of the categories where the place of supply is the overseas customer's location, UK VAT may not apply.
If the general B2C supplier-location rule applies, the result may be different.
Certain services do not simply follow the normal B2B or B2C rules.
Special rules can apply to services connected with areas such as:
Businesses providing these services should check the specific VAT rules.
For consultancy supplied to an overseas business, the general B2B place-of-supply rule will often apply.
For example:
UK consultancy → Australian company
If the Australian company is acting as a business and no special rule applies:
Place of supply → Australia
UK VAT → generally not charged
Certain consultancy services supplied to non-business customers outside the UK can also have special B2C treatment.
Accounting and similar professional services supplied to overseas business customers will often follow the general B2B rule.
For example:
UK accountant → US company
may generally have its place of supply in the USA.
UK VAT would therefore generally not be charged where the normal B2B rule applies.
Many marketing and advertising services supplied B2B will also generally follow the customer's location.
For example:
UK marketing agency
↓
German business customer
↓
Place of supply generally Germany
↓
UK VAT generally not charged
The German business may instead have local VAT obligations.
Web design, software development and similar professional services supplied to overseas businesses can often follow the general B2B rule.
For example:
UK web developer → Canadian company
could generally result in the place of supply being Canada.
However, businesses should distinguish custom professional services from automated digital services because different rules can apply in some B2C situations.
Software-as-a-Service businesses frequently sell internationally.
For B2B sales:
UK SaaS company → overseas business
The general B2B rule may place the supply where the customer belongs.
For B2C sales, digital-services rules may become relevant.
SaaS companies selling globally should therefore identify customers correctly as B2B or B2C and collect appropriate location evidence.
Digital services can have specific VAT rules.
Examples can include certain:
Digital services supplied to consumers outside the UK can generally have their place of supply where the consumer belongs.
This can mean UK VAT is not charged, but local VAT, GST or sales tax may apply in the customer's country.
A UK company selling qualifying digital services to consumers in EU countries may need to consider EU VAT.
For example:
UK digital business
↓
Consumer in Italy
↓
UK VAT may not apply
↓
Italian VAT may potentially apply
The business may therefore need to consider the EU's VAT registration and reporting mechanisms.
No UK VAT does not mean no VAT anywhere.
Property-related services can have special rules.
The place of supply for certain services connected with land is generally determined by where the land or property is located.
For example:
UK company provides qualifying architectural service relating to property in Spain
The VAT treatment may be determined by the Spanish location of the property rather than simply by where the customer belongs.
This can potentially create Spanish VAT considerations.
The opposite can also happen.
Imagine a US company hires a UK business to provide certain services directly connected with a property in London.
Even though the customer is American, the service may have a UK place of supply because the property is located in the UK.
UK VAT may therefore apply.
This demonstrates why:
Overseas customer ≠ automatically outside UK VAT
Certain event-related services can be taxed according to where an event physically takes place.
This can include certain services relating to:
A UK company organising or supplying services connected with overseas events should therefore check the specific place-of-supply rules.
Online training can be more complicated than it first appears.
VAT treatment can depend on whether the training is:
Live and instructor-led
or
Pre-recorded and automated
A fully automated online course may potentially be treated as an electronic service, while live teaching can receive different VAT treatment.
Businesses selling online courses internationally should therefore classify the service correctly.
Brexit changed the UK's VAT relationship with the EU, but services supplied between UK and EU businesses generally follow international place-of-supply principles.
For many ordinary B2B services:
UK company → EU business
↓
Place of supply where EU business belongs
↓
UK VAT generally not charged
The EU customer may instead account for VAT locally.
For many B2B services supplied to US businesses, UK VAT will generally not be charged where the general B2B rule applies.
For example:
UK consulting company → US corporation
can generally be:
Outside the scope of UK VAT
However, the UK company should also consider whether it has any US tax obligations.
US sales tax and UK VAT are separate systems.
Again, the answer depends on the service and customer.
For many B2B services supplied to an Australian business, the general place-of-supply rule can mean UK VAT is not charged.
However, the UK company may need to consider Australian GST requirements depending on its activities.
For many B2B services, the same broad UK VAT principle applies.
If the business customer belongs in Canada and the general B2B rule applies, the place of supply will generally be outside the UK.
UK VAT would therefore normally not be charged.
Canadian GST/HST obligations should be considered separately where relevant.
Yes.
This is why international VAT cannot be reduced to a simple rule.
UK VAT can potentially apply where:
Always determine the place of supply before issuing the invoice.
It depends on where the services are treated as supplied.
Services whose place of supply is outside the UK are generally not UK taxable supplies for VAT-registration turnover purposes.
However, the precise treatment depends on the nature of the transaction.
Businesses earning significant international revenue should therefore classify their turnover carefully.
Do not simply add or remove all overseas sales when calculating VAT-taxable turnover.
Potentially.
A VAT-registered UK company may be able to recover VAT on qualifying business expenses connected with certain services supplied outside the UK, subject to the normal input-tax recovery rules.
For example, eligible VAT might potentially arise on:
The normal VAT recovery restrictions still apply.
The invoice should accurately reflect the VAT treatment.
Depending on the transaction, it may contain:
Do not simply mark every international invoice:
“VAT 0%”
because many international services are not actually zero-rated.
They may instead be outside the scope of UK VAT.
Yes.
A UK company can invoice customers in foreign currencies such as:
Appropriate currency conversion may still be required for UK VAT and accounting records.
For international service transactions, consider keeping:
Your records should make it possible to explain why UK VAT was or was not charged.
Common mistakes include:
Before issuing an international service invoice, ask:
Is the customer a business or consumer?
↓
Where does the customer belong?
↓
What exact service am I providing?
↓
Does the general B2B or B2C rule apply?
↓
Is there a special place-of-supply rule?
↓
Where is the place of supply?
↓
Should UK VAT be charged?
↓
Does a reverse charge apply?
↓
Could foreign VAT, GST or sales tax apply?
This process provides a much stronger basis for VAT treatment than simply looking at whether the customer has an overseas address.
Sometimes. The answer depends primarily on the place-of-supply rules, customer status and type of service.
For many B2B services, UK VAT is generally not charged when the overseas business customer belongs outside the UK and the general B2B rule applies.
For many ordinary B2B services, the place of supply is where the EU business customer belongs, so UK VAT is generally not charged.
For many B2B services supplied to US businesses, the place of supply is generally in the USA and UK VAT is not charged.
Sometimes. The answer depends on the service. The general B2C rule and various exceptions need to be considered.
Not necessarily. Many services supplied internationally are outside the scope of UK VAT, rather than zero-rated.
The reverse charge can require an overseas business customer to account for VAT locally instead of the UK supplier charging UK VAT.
Yes. Digital and electronically supplied services can have specific place-of-supply rules, particularly when supplied to consumers.
Special rules apply to certain land-related services, and the place of supply can be where the property is located.
Potentially, subject to the normal VAT recovery rules and the nature of the company's supplies.
So, does a UK company charge VAT on international services?
Sometimes — but the customer's overseas location alone does not determine the answer.
For many B2B services:
UK company
↓
Overseas business customer
↓
Place of supply where customer belongs
↓
Generally no UK VAT
For B2C services:
UK company
↓
Overseas consumer
↓
Identify exact service
↓
Apply relevant B2C rule
↓
Determine whether UK VAT applies
For specialist services:
Check special place-of-supply rules
The most important point is that international services should not automatically be recorded as “0% VAT.”
A service may instead be:
Outside the scope of UK VAT
and an overseas customer may have to account for VAT or another tax in their own country.
Use this process:
B2B or B2C → Identify service → Determine place of supply → Apply UK VAT treatment → Check foreign tax obligations → Keep supporting records
This article provides general information only and does not constitute tax, accounting, financial or legal advice. VAT and international tax rules can change and the correct treatment depends on the particular service and transaction. Check current HMRC guidance or obtain professional VAT advice where appropriate.
