Does a UK Company Charge VAT to US Customers?

Usually, a UK company will not charge UK VAT on many sales to customers in the United States, but the correct treatment depends on what the company is selling.

The most important distinction is whether you are selling:

Goods

or

Services

Goods exported from the UK to the United States can generally be zero-rated for UK VAT when the relevant export conditions are satisfied.

For services, the VAT treatment depends on the place-of-supply rules and whether the US customer is a business or consumer.

This means:

US customer ≠ automatically no VAT

The individual transaction still needs to be classified correctly.

This guide explains how UK VAT generally works when a UK limited company sells to customers in the USA.

Does a UK Company Charge VAT on Goods Sold to US Customers?

If a VAT-registered UK company sells goods that are exported from the UK to the United States, the sale can generally be zero-rated for UK VAT, provided the relevant conditions are satisfied.

For example:

UK company

↓

Sells goods to US customer

↓

Goods are exported from the UK to the USA

↓

Qualifying export may be charged at 0% UK VAT

Zero-rated does not mean VAT exempt.

The sale remains a taxable supply, but the VAT rate applied is 0%.

Example: UK Company Selling Goods to a US Customer

Imagine a UK VAT-registered company sells equipment to a customer in California.

The goods are shipped:

UK → California

The invoice could potentially show:

Equipment: £2,000

UK VAT at 0%: £0

Total: £2,000

The company may zero-rate the export if HMRC's requirements are satisfied.

The US customer may separately face US customs duties, import charges or other applicable taxes.

These are separate from UK VAT.

Do I Need Proof That the Goods Were Exported?

Yes.

This is extremely important.

You cannot simply apply 0% VAT because the customer entered a US delivery address.

The company needs appropriate evidence demonstrating that the goods were actually exported from the UK.

Depending on how the goods are shipped, evidence could include:

• courier documentation;
• customs declarations;
• shipping documents;
• freight-forwarder records;
• certificates of posting;
• transport documents; and
• other commercial evidence of export.

HMRC requires businesses to satisfy the relevant export conditions and retain appropriate evidence.

How Long Do I Have to Obtain Export Evidence?

HMRC's current guidance generally requires businesses zero-rating exports to obtain evidence of export within the applicable time limit.

For many exports, HMRC currently specifies a period of three months from the time of sale, although exceptions and different rules can apply in particular circumstances.

Because these requirements can change, businesses should check the current HMRC export guidance when processing international sales.

What Happens If I Cannot Prove the Goods Were Exported?

Your company may lose the right to zero-rate the transaction.

That could mean UK VAT becomes payable.

For example, imagine you sell:

Goods: £1,000

and treat the sale as a zero-rated export.

If you later cannot demonstrate that the goods qualified for zero-rating, HMRC could potentially require the company to account for VAT.

The company might then have difficulty recovering that additional amount from the customer.

Maintaining export documentation is therefore essential.

What If the US Customer Collects the Goods From the UK?

The position can become more complicated.

If an overseas customer arranges to collect goods from your UK premises and subsequently exports them, the transaction may potentially qualify as an indirect export.

Specific conditions need to be satisfied.

Your company should obtain suitable evidence that the goods actually left the UK before treating the sale as zero-rated.

Do not automatically apply 0% VAT simply because the purchaser says they intend to take the goods to America.

What If the Goods Are Delivered to a UK Address?

This is very important.

Suppose your customer lives in the United States but asks you to deliver the goods to:

London

The customer being American does not make the transaction an export.

If the goods are supplied and delivered within the UK, the normal UK VAT treatment may apply.

For VAT purposes, the movement and location of the goods can matter more than the nationality of the customer.

What If My Goods Are Already in the USA?

This creates a different situation.

Imagine a UK company owns stock stored in a warehouse in Florida.

A US customer buys a product and the goods move:

Florida warehouse → Florida customer

Those goods are not being exported from the UK.

HMRC's export guidance states that goods located outside the UK at the time of supply are not UK exports and their supply is outside the scope of UK VAT.

However, the company may have US tax obligations instead.

Does a UK Company Charge VAT on Services to US Customers?

The answer depends heavily on whether the customer is:

B2B — a business customer

or

B2C — a consumer

For services, VAT is generally determined using the place-of-supply rules.

If the place of supply is outside the UK, UK VAT generally does not apply.

Does a UK Company Charge VAT on Services to a US Business?

For many ordinary B2B services, UK VAT is generally not charged.

HMRC's general B2B rule is that the place of supply of services is where the business customer belongs.

For example:

UK company

↓

Provides consulting services

↓

Customer is a US business

↓

Customer belongs in USA

↓

Place of supply generally USA

↓

Outside the scope of UK VAT

This can apply to many common professional and business services, subject to exceptions.

Example: UK Consultancy Selling to a US Company

Suppose a UK limited company provides consulting services to a company in New York.

Invoice:

Consultancy: £5,000

If the normal B2B place-of-supply rule applies:

UK VAT: £0

The £5,000 service is generally outside the scope of UK VAT because the place of supply is where the US business customer belongs.

However, the UK company should retain appropriate evidence that the customer is genuinely in business.

What Evidence Should I Keep for a US Business Customer?

HMRC expects suppliers relying on the B2B place-of-supply rules to establish that the overseas customer is acting as a business.

Potential evidence could include:

• company registration details;
• business website;
• commercial agreement;
• tax identification details;
• business address;
• purchase order;
• company correspondence; and
• other reasonable evidence of business activity.

Unlike EU businesses, US companies do not normally have an EU VAT number.

Therefore, other evidence may be necessary to establish their business status.

Does a UK Company Charge VAT on Consulting Services to the USA?

For many consulting services supplied to US businesses, the general B2B place-of-supply rule means the supply is outside the scope of UK VAT.

This can potentially include services such as:

• management consulting;
• business consulting;
• marketing consulting;
• certain IT services;
• professional advisory services;
• accounting services; and
• other similar services.

However, special place-of-supply rules can override the general rule for particular services.

What About Services to US Consumers?

This requires more care.

The general B2C rule for many services is that the place of supply is where the supplier belongs.

Therefore, a UK company supplying certain services to a US consumer could potentially have a UK place of supply.

However, there is an important exception.

HMRC specifically provides that a number of services supplied to non-business customers who belong outside the UK are treated as supplied where the customer belongs.

These include certain:

• advertising services;
• consultancy services;
• legal services;
• accounting services;
• data processing;
• provision of information;
• financial and insurance services;
• supply of staff;
• telecommunications;
• broadcasting services; and
• electronically supplied services.

As a result, many services supplied by UK companies to US consumers can also fall outside UK VAT.

The exact service must be considered.

Example: UK Consultant Serving a US Consumer

Imagine a UK consultant provides qualifying consultancy services remotely to an individual living in Texas.

Because HMRC has specific rules for certain services supplied to non-business customers outside the UK, the place of supply may be where the US customer belongs.

In that situation, UK VAT would generally not apply.

However, this should not be used as a blanket rule for every type of B2C service.

What Services Can Have Special VAT Rules?

Special place-of-supply rules apply to various services.

These can include services connected with:

• land and property;
• events;
• entertainment;
• education;
• transport;
• telecommunications;
• broadcasting;
• electronic services;
• hiring goods;
• work on goods; and
• other specified activities.

These special rules can override the normal B2B or B2C treatment.

Always identify exactly what service your company supplies before determining the VAT treatment.

What About Digital Services Sold to US Customers?

Digital services can have specific VAT rules.

Examples may include certain:

• software downloads;
• apps;
• digital subscriptions;
• streaming services;
• online content;
• automated online services; and
• electronically supplied products.

HMRC's rules generally place electronically supplied services to non-business customers outside the UK where the overseas customer belongs.

Therefore, UK VAT may not apply to qualifying digital services supplied to US consumers.

However, this does not necessarily mean the transaction is tax-free.

US state and local sales-tax rules may need to be considered.

Does a UK SaaS Company Charge VAT to US Customers?

For many SaaS businesses, UK VAT may not apply where the relevant place-of-supply rules place the service in the United States.

For example:

UK SaaS company → US business

The general B2B rule may place the supply where the US business customer belongs.

For qualifying electronically supplied services to US consumers, the place of supply may also be outside the UK.

However, the company should separately investigate whether it has US sales-tax obligations.

What About Online Courses?

Online education can be more complicated.

VAT treatment can depend on how the course is delivered.

For example, an automated digital course can potentially receive different treatment from:

Live teacher-led training

or

In-person training

Some services are taxed according to where they are physically performed.

Do not assume every online course is simply a digital service for VAT purposes.

Does a UK Company Charge VAT on Marketing Services to US Customers?

For B2B marketing services supplied to a US company, the general place-of-supply rule will often place the supply in the USA.

UK VAT would therefore generally not be charged.

Advertising services supplied to non-business customers outside the UK can also fall within specific rules that place the supply where the overseas customer belongs.

The exact service should still be classified correctly.

Does a UK Company Charge VAT on Software Sold to US Customers?

It depends on what is actually being sold.

Software could potentially involve:

• physical goods;
• downloaded software;
• software licences;
• SaaS subscriptions;
• customised development; or
• electronically supplied services.

Each can have different VAT considerations.

For many electronically supplied services to US customers, UK VAT may not apply because the place of supply is outside the UK.

Does a UK Company Charge VAT to US Customers on Shopify?

If your UK company uses Shopify to sell physical goods to customers in the USA, goods genuinely exported from the UK may potentially be zero-rated for UK VAT.

However, your company should ensure that:

• the shipping address is in the USA;
• the goods actually leave the UK;
• appropriate export evidence is retained;
• Shopify's tax settings are configured correctly; and
• any US sales-tax obligations are considered separately.

Shopify's settings do not determine your company's legal tax obligations.

Does a UK Company Charge VAT on Amazon Sales to the USA?

Again, the answer depends on where the stock is located.

Stock in UK

If goods move:

UK → USA

the transaction may potentially qualify as a zero-rated UK export.

Stock Already in USA

If goods move:

US Amazon warehouse → US customer

there is no export from the UK.

UK VAT may therefore not apply, but US tax rules may.

Businesses using fulfilment services should always know where their inventory is physically stored.

Is US Sales Tax the Same as UK VAT?

No.

US sales tax and UK VAT are different systems.

UK VAT is a value-added tax administered nationally.

US sales tax is generally administered at state and local level.

Different states can have different:

• tax rates;
• registration requirements;
• economic nexus thresholds;
• product exemptions; and
• filing requirements.

A UK company can therefore have:

No UK VAT

but still potentially have:

US sales-tax obligations

These are separate questions.

Can a UK Company Need to Register for US Sales Tax?

Potentially.

A UK company selling into the United States may create sales-tax obligations depending on its activities and the laws of individual states.

Relevant factors can include:

• sales volume;
• transaction volume where applicable;
• physical presence;
• employees;
• offices;
• warehouses;
• inventory;
• fulfilment centres; and
• economic nexus rules.

The requirements vary by state.

A UK company selling significant volumes to US customers should therefore review its US sales-tax position separately from UK VAT.

What If My Company Uses a US Warehouse?

Storing stock in the United States can have important tax consequences.

Suppose:

UK company owns stock

↓

Stock stored in California

↓

Goods sold to California customer

The transaction is not a UK export at the point of that customer sale because the goods are already outside the UK.

UK VAT would generally not apply to that local US sale.

However, holding inventory in a US state can be relevant to US sales-tax obligations.

What If I Dropship Products to US Customers?

Dropshipping requires careful analysis because the goods may never enter the UK.

For example:

UK company receives order from US customer

↓

Chinese supplier ships product directly to USA

The goods:

China → USA

never physically enter the UK.

This is therefore not simply a UK export.

The UK VAT treatment and US tax treatment need to be considered based on the actual supply chain.

Do not automatically treat every international sale made by a UK company as a zero-rated UK export.

Does the Customer's Nationality Matter?

Usually, the customer's nationality itself is not the determining factor.

For example:

American customer buys goods delivered in London

is different from:

British customer buys goods exported to New York

For goods, the location and movement of the goods are important.

For services, where the customer belongs and the applicable place-of-supply rules are generally more important than nationality.

Do US Sales Count Towards UK VAT Taxable Turnover?

It depends on the transaction.

Zero-rated exports remain taxable supplies for UK VAT purposes.

Therefore, qualifying zero-rated exports can still be relevant when calculating VAT-taxable turnover.

Services whose place of supply is outside the UK receive different treatment.

Do not automatically remove all US revenue when determining whether your company needs to register for UK VAT.

What Should the Invoice Show?

The correct invoice treatment depends on why UK VAT is not being charged.

For example:

Goods Exported to USA

The transaction may be recorded as a zero-rated export.

B2B Service to US Business

The transaction may be recorded as outside the scope of UK VAT.

These are not the same thing.

Avoid simply recording every US transaction as:

“No VAT.”

Your accounting records should show the correct VAT reason.

Zero-Rated vs Outside the Scope

This distinction is particularly important when dealing with US customers.

Zero-Rated

Example:

Goods exported UK → USA

The sale remains a UK taxable supply but VAT applies at 0%.

Outside the Scope

Example:

Qualifying B2B service supplied UK company → US business

The place of supply is outside the UK.

Therefore, the transaction is generally outside the scope of UK VAT.

Both may result in:

£0 UK VAT charged

but for completely different reasons.

What Records Should My Company Keep?

For sales to US customers, consider retaining:

• customer invoices;
• export documentation;
• courier records;
• customs declarations;
• proof of delivery;
• customer business information;
• contracts;
• purchase orders;
• shipping records;
• place-of-supply analysis; and
• relevant US tax records.

Good documentation is especially important where the company has substantial international revenue.

Common VAT Mistakes When Selling to the USA

Common mistakes include:

• assuming every US sale is VAT-free;
• confusing zero-rated exports with outside-the-scope services;
• zero-rating goods without evidence of export;
• treating a US customer's nationality as the deciding factor;
• ignoring where inventory is stored;
• treating goods delivered to a UK address as exports;
• failing to establish whether a service customer is B2B or B2C;
• ignoring special place-of-supply rules;
• failing to consider US sales tax;
• assuming Shopify automatically handles everything;
• treating dropshipped goods as UK exports when they never enter the UK; and
• failing to retain adequate records.

Frequently Asked Questions

Does a UK company charge VAT to US customers?

Not necessarily. Goods exported from the UK to the USA can generally be zero-rated when the export conditions are satisfied. Many services supplied to US customers can also fall outside the scope of UK VAT under the relevant place-of-supply rules.

Do I charge VAT on goods shipped from the UK to the USA?

Qualifying exports can generally be charged at 0% UK VAT, provided HMRC's export conditions and evidence requirements are satisfied.

Do I charge VAT to a US business?

For many B2B services, no UK VAT is charged because the general place-of-supply rule places the supply where the US business customer belongs.

Do I charge VAT to US consumers?

It depends on what you sell. Goods exported from the UK can potentially be zero-rated. For services, the applicable B2C place-of-supply rules need to be considered.

Do I charge VAT on consultancy services to a US company?

Under the general B2B place-of-supply rule, consultancy supplied to a US business will generally be outside the scope of UK VAT, assuming no special rule overrides the general treatment.

Do I charge VAT on digital services to US customers?

Qualifying electronically supplied services to customers belonging outside the UK may have their place of supply outside the UK. The precise treatment depends on the customer and service.

Do I charge VAT on Shopify orders from America?

If physical goods are genuinely exported from the UK to a US customer, the transaction may potentially be zero-rated for UK VAT. Keep appropriate evidence of export.

Is US sales tax the same as VAT?

No. US sales tax is a separate state and local tax system.

Can I owe US sales tax even if I do not charge UK VAT?

Yes. UK VAT and US sales tax are separate. A UK company may have no UK VAT liability on a transaction but still have US tax obligations.

Do zero-rated US exports count toward VAT turnover?

Potentially, yes. Zero-rated exports remain taxable supplies.

Final Thoughts

So, does a UK company charge VAT to US customers?

Often, UK VAT will not result in an additional charge to the US customer, but the reason depends on what you are selling.

For physical goods:

Goods in UK

↓

Exported to USA

↓

Qualifying export

↓

Potentially 0% UK VAT

For many B2B services:

UK company

↓

US business customer

↓

Place of supply in USA

↓

Generally outside the scope of UK VAT

For B2C services:

Identify the exact service

↓

Apply the relevant place-of-supply rule

↓

Determine whether UK VAT applies

And remember:

No UK VAT does not necessarily mean no tax.

Your company may still need to consider US state sales tax, customs duties, import charges or other US tax obligations.

The safest approach is to determine:

Goods or services? → Where are the goods/customer? → B2B or B2C? → What VAT rule applies? → Is US tax relevant?

Do not apply a blanket “US customer = no VAT” rule.

This article provides general information only and does not constitute tax, accounting, financial or legal advice. UK VAT and US tax rules can change and depend on the circumstances of each transaction. Check current HMRC guidance and obtain professional UK or US tax advice where appropriate.

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