By
August 11, 2026
Does a UK Company Charge VAT to Overseas Customers?
Not always.
A UK company does not automatically charge UK VAT simply because it is VAT registered, and it does not automatically remove VAT simply because the customer is overseas.
The correct treatment depends on factors such as:
For many overseas transactions, UK VAT may not be charged. However, the customer or supplier may still have VAT or similar tax obligations in another country.
This guide explains the main rules UK limited companies should understand when selling to overseas customers.
Sometimes.
The first question should be:
Are you selling goods or services?
The VAT rules for exported goods are different from the rules for services supplied to overseas customers.
A useful starting point is:
Goods → Consider where the goods are located and where they are sent
Services → Consider the place-of-supply rules
You then need to establish whether the customer is a business or consumer and whether any exceptions apply.
Where goods are genuinely exported from the UK, they can often be zero-rated for UK VAT, provided the relevant conditions are satisfied.
HMRC states that most exports of goods from Great Britain to destinations outside the UK can be zero-rated. Different rules can apply to movements involving Northern Ireland and the EU.
Zero-rating means:
Net sale: £1,000
VAT at 0%: £0
Customer pays: £1,000
The transaction remains a taxable supply even though VAT is charged at 0%.
Zero-rated does not mean the transaction is outside the VAT system.
A zero-rated export remains a taxable supply.
This means the company may still:
This is different from a VAT-exempt transaction.
You generally need appropriate evidence showing that the goods were actually exported.
This can include suitable commercial or official evidence depending on the transaction.
Examples might include:
Zero-rating should not simply be applied because the customer has a foreign address.
The goods must actually satisfy the export conditions.
This can create a VAT problem.
If the conditions for zero-rating are not satisfied or appropriate export evidence is not obtained within the required period, the company may have to account for UK VAT.
This means:
Foreign customer address ≠ automatic zero-rating
You need evidence supporting the export.
Keeping shipping and customs records alongside the sales invoice is therefore extremely important.
Imagine a VAT-registered UK company sells equipment to a customer in New York.
The goods are shipped:
UK warehouse → USA customer
If the export satisfies HMRC's requirements and the company retains the required evidence, the sale may potentially be zero-rated for UK VAT.
The invoice might therefore show:
Equipment: £5,000
UK VAT at 0%: £0
Total: £5,000
The customer may still have to deal with import taxes, customs duties or local taxes when the goods enter the United States.
Those charges are separate from UK VAT.
Different rules can apply where an overseas customer or its agent collects goods from the UK and arranges their export.
HMRC refers to this as an indirect export.
Zero-rating can still potentially apply, but specific requirements need to be satisfied and the supplier needs appropriate evidence that the goods were exported.
These transactions should be documented carefully.
Services are generally governed by the place-of-supply rules.
The place of supply determines which country's VAT rules apply.
For many services, one of the most important distinctions is whether the overseas customer is:
a business — B2B
or
a consumer — B2C
Different general rules apply.
For many business-to-business services, the general rule is that the place of supply is where the business customer belongs.
For example:
UK company → German business customer
If the general B2B rule applies, the place of supply may be Germany rather than the UK.
The service may therefore be outside the scope of UK VAT.
The overseas customer may instead need to account for VAT under the applicable local reverse-charge mechanism.
However, exceptions apply to certain types of services.
Suppose a UK VAT-registered consultancy provides management consulting to a business customer based in the United States.
If the normal B2B place-of-supply rule applies:
Supplier belongs in UK
Business customer belongs in USA
Place of supply → USA
The consultancy would generally not charge UK VAT.
The invoice and accounting records should reflect the appropriate VAT treatment.
Yes, it can be important.
The B2B place-of-supply treatment depends on the customer being a relevant business customer.
Companies should therefore retain reasonable evidence of the customer's business status.
Depending on the country and circumstances, this might include:
Do not automatically treat every foreign customer as B2B simply because they entered a company name at checkout.
Where a UK business supplies certain services to an overseas business, the customer may need to account for local VAT under a reverse-charge mechanism.
In simple terms:
UK supplier → Does not charge UK VAT
↓
Overseas business customer → Accounts for local VAT where required
The precise rules depend on the country and type of service.
The invoice may need suitable wording depending on the circumstances.
The general rule for many B2C services is different.
For many services supplied to non-business customers, the place of supply is where the supplier belongs.
This can mean a UK company still needs to charge UK VAT even when the consumer lives overseas.
However, there are important exceptions.
Certain services supplied to consumers outside the UK can have a place of supply outside the UK.
The exact service therefore needs to be identified.
Imagine a UK company provides a service to an individual customer living overseas.
You should not simply conclude:
Customer overseas → No VAT
Instead ask:
What service is being supplied?
Some services follow the normal B2C rule.
Others have special place-of-supply rules.
The answer therefore depends on the exact service.
Special place-of-supply rules can apply to services involving areas such as:
These can override the normal B2B or B2C rules.
This is why companies with unusual or international services should check the exact VAT category.
Digital services supplied to consumers can have specific VAT rules.
Examples may include certain:
Where digital services are supplied to consumers outside the UK, UK VAT may not apply, but the business may need to consider VAT or sales-tax obligations in the customer's country.
Digital businesses should therefore look beyond UK VAT alone.
Services connected with land or property can have special place-of-supply rules.
For example, the relevant location may be where the property itself is situated rather than where the supplier or customer belongs.
This can affect services involving:
Businesses dealing with foreign property should check the specific rules.
Sometimes.
Following the UK's departure from the EU VAT area for most purposes, supplies between Great Britain and EU customers are generally treated under international VAT rules.
For goods exported from Great Britain to EU destinations, qualifying exports can generally be zero-rated where the required conditions are met.
For services, the appropriate place-of-supply rules apply.
Northern Ireland has separate rules for certain goods transactions involving the EU.
Northern Ireland has special VAT arrangements for goods traded with EU member states.
This means a company dealing with goods moving between Northern Ireland and the EU may need to follow rules different from those applying to goods exported from Great Britain.
Services generally follow the wider UK place-of-supply framework.
Companies involved with Northern Ireland–EU goods trade should check the specific HMRC rules.
It depends on the transaction.
Goods exported from the UK to the United States may potentially be zero-rated where the export requirements are satisfied.
Many services supplied to a US business will fall outside the scope of UK VAT under the general B2B place-of-supply rule.
The answer depends on the type of service and applicable B2C rules.
The company may also need to consider US state sales-tax obligations, depending on its activities.
The same broad principle applies:
Overseas destination alone does not determine the VAT treatment.
For goods, consider the export rules.
For services, determine the place of supply.
You may also need to consider tax requirements in the customer's country.
A transaction can be outside UK VAT while still creating foreign VAT, GST or sales-tax obligations.
Ecommerce businesses need to consider several factors.
These can include:
Do not assume that a UK VAT number determines the tax treatment of every international online sale.
This is especially important.
Suppose a UK company owns inventory stored in Germany and sells that inventory to a customer in Germany.
The goods do not leave the UK because they were never located there at the time of the sale.
The transaction may therefore create German VAT obligations rather than being treated as a UK export.
Similarly, storing stock in overseas fulfilment centres can potentially trigger foreign VAT registrations.
Sometimes marketplaces have specific responsibilities for VAT or similar taxes.
However, this does not mean the seller can ignore VAT completely.
Your company may still need to:
Review marketplace tax reports carefully.
Shopify and other ecommerce platforms can calculate taxes based on settings, but the company remains responsible for determining its VAT obligations.
Incorrect settings can result in:
Configure international tax settings based on your actual business model.
The VAT treatment of shipping can depend on the underlying transaction.
For exported goods, freight and delivery charges connected with the export can receive specific VAT treatment.
The way shipping is contracted and invoiced can matter.
Businesses with significant international shipping costs should ensure these charges are classified correctly.
Service businesses selling globally should establish a repeatable VAT process.
For each sale, determine:
Customer location
↓
B2B or B2C
↓
Type of service
↓
Place of supply
↓
Does UK VAT apply?
↓
Does foreign VAT apply?
This process is much safer than relying on one blanket rule for every overseas invoice.
This depends on the VAT treatment of the transaction.
For example, zero-rated exports remain taxable supplies, so they can still be relevant to UK taxable turnover.
Services whose place of supply is outside the UK may receive different treatment.
Businesses approaching VAT registration thresholds should therefore classify overseas income properly rather than simply removing all international sales from their calculations.
The information required depends on the transaction.
An invoice might need to show:
The precise wording depends on the applicable VAT rules.
That is not a good approach.
There are several different reasons why UK VAT may not appear on an invoice.
For example:
Zero-rated export
is different from:
Outside the scope of UK VAT
which is different from:
VAT-exempt
or:
Reverse charge
The accounting treatment can differ.
Your records should identify why UK VAT was not charged.
For overseas transactions, consider keeping:
The documentation should support the VAT treatment applied.
Businesses should avoid:
International VAT errors can become expensive because more than one country's tax system may be involved.
Sometimes. The answer depends on whether the company sells goods or services, where the customer belongs and the relevant VAT rules.
Most qualifying exports from Great Britain to destinations outside the UK can be zero-rated if the required conditions and evidence requirements are satisfied.
For many B2B services, the place of supply is where the business customer belongs. If that is outside the UK, the service may be outside the scope of UK VAT.
Sometimes. Many B2C services follow the supplier-location rule, while others have special rules that may place the supply outside the UK.
It depends. Exported goods may be zero-rated, many B2B services may be outside UK VAT, and B2C services depend on the type of service.
It depends on whether you sell goods or services, customer status and where the transaction occurs. Special rules apply to certain Northern Ireland–EU goods movements.
Zero-rated means VAT applies at 0% and the sale remains a taxable supply. It is not the same as being outside the scope or exempt.
Yes. Appropriate export evidence is generally required to support zero-rating.
Potentially. Even where UK VAT is not due, local VAT, GST or sales-tax obligations can arise in the customer's country.
So, does a UK company charge VAT to overseas customers?
Sometimes — but there is no single rule for every international sale.
Start by asking:
Goods or services?
If you sell goods:
Where are the goods located?
Where are they being sent?
Do the export conditions apply?
If you sell services:
Is the customer B2B or B2C?
Where does the customer belong?
What is the place of supply?
For many exports of goods, the sale may potentially be zero-rated.
For many B2B services supplied to overseas businesses, the transaction may be outside the scope of UK VAT under the general place-of-supply rule.
But special rules can apply, and a transaction that has no UK VAT may still create tax obligations abroad.
The safest approach is:
Identify transaction → Determine place of supply/export treatment → Apply correct VAT treatment → Keep evidence → Check foreign obligations
For companies selling internationally at scale, particularly ecommerce businesses or companies storing stock overseas, specialist VAT advice may be worthwhile.
This article provides general information only and does not constitute tax, accounting, financial or legal advice. VAT rules depend on the transaction and can change. Check current HMRC guidance and relevant overseas tax requirements for your company's circumstances.
