| B2B, general rule | taxable where the customer belongs; the UK customer accounts by reverse charge |
| B2C, general rule | taxable where you belong |
| Threshold for you without a UK establishment | none |
| Special rules | land and construction, admission to events, hire of means of transport, digital services to consumers and more |
| Digital services to UK consumers | UK VAT, registration or platform |
| From 1 April 2027 (announced) | reverse charge only for customers registered for UK VAT |
Two general rules, and the exceptions first
With services, VAT first asks where the supply is treated as made. If that place is the UK, UK VAT arises. If it is outside, the service is not taxable in the UK. UK law has two general rules: to businesses (B2B) the service is taxable where the customer belongs. To consumers (B2C) it is taxable where you as supplier belong.
The order matters: first check whether a special rule fits, and only if none does, the general rule applies. That is also why HMRC wants your invoices to say clearly what you supply. 'Consultancy' or 'project fee' is not enough if it does not show whether land, an event or pure advice is involved.
And who is a business? If your customer gives you a VAT number, you may assume a business unless something points to private use. If they can show neither a number nor other evidence of business activity, treat the supply as B2C.
B2B: the reverse charge does most of the work
If you advise a UK business, write software for it or run its marketing, the service is taxable in the UK, and your customer accounts for UK VAT itself. It books the tax as due in its return and deducts it as input tax in the same step. If it can deduct in full, it costs nothing. Your invoice carries no UK VAT.
For you that means: if all you supply in the UK are services subject to the reverse charge, you may not register there at all. UK VAT charged to you on costs in the UK, such as hotels or trade fair stands, you then reclaim through the refund scheme for overseas businesses. The refund year runs from 1 July to 30 June, and the claim must reach HMRC by the following 31 December.
Today the reverse charge applies to almost all B2B services under the general rule, even if your UK customer is not registered itself. It must then count your services towards its own registration threshold. That is exactly the arrangement the government wants to change.
In the Budget of 28 October 2026 the government announced restricting the reverse charge on services from abroad, from 1 April 2027, to customers registered for VAT in the UK. If you supply a UK business that is not registered, you will then have to account for the VAT yourself and register for it. The change is to become law with the Finance Bill 2026-27; as of today it is announced but not yet passed.
The special rules that most often affect businesses from abroad
The basis is HMRC's VAT Notice 741A. The table shows the place of supply and who accounts for UK VAT when that place is the UK.
| Service | Place of supply | Who pays the UK VAT? |
|---|---|---|
| Construction, alteration, demolition, services relating to a specific piece of land | where the land is, B2B and B2C | a registered UK customer by reverse charge; otherwise you, with registration |
| Admission ticket to a fair, conference or seminar sold to a business | where the event takes place | a registered UK customer by reverse charge; otherwise you |
| Stand space with the right to exhibit, organising a conference | general B2B rule, where the customer belongs | the customer by reverse charge, if it belongs in the UK |
| Course, seminar or performance for private individuals | where the service is performed | you, with registration |
| Digital services to UK consumers | where the consumer is in the UK | you with registration, or the platform |
HMRC VAT Notice 741A, sections 5 to 9 and 13; HMRC: VAT rules for supplies of digital services to consumers
Land, installation, events: when you must register
Services directly relating to land are always taxable where the land is, whoever the customer is and wherever it belongs. That affects construction and installation firms from abroad working on UK sites. If your customer is UK-registered, it accounts by reverse charge. If not, a private client for example, you owe the UK VAT and must register. Construction often brings the UK deduction scheme for subcontractors on top; we explain it in the Construction Industry Scheme.
With events the line is fine. To businesses, only admission is taxable where the event takes place. HMRC treats stand space with the right to exhibit or organising a conference under the general B2B rule. To private individuals, cultural, sporting, scientific, entertainment and educational services are taxable where they are performed. An in-person seminar in Manchester for private participants is therefore taxable in the UK, and you need registration.
Another special rule pulls the tax to where a service is actually used: hire of goods, telecommunications and electronic services to businesses. If you hire equipment to a UK customer who uses it in the UK, the hire is taxable there, even where the general rule would say otherwise.
Digital services to consumers: no threshold
If you sell e-books, software subscriptions, apps or automated online courses to consumers in the UK, the supply is taxable there. As a business without a UK establishment you have no threshold: you must register from the first sale. If the sale runs through a platform or app store that sets the terms, handles payment or delivers, the platform owes the VAT, and you are out.
How these supplies look from your home country's side, for example when you receive invoices from the UK, is a question of your country's VAT rules; the UK side after Brexit is summarised in our Brexit section.
Isle of Man, Channel Islands, Northern Ireland
The Isle of Man belongs to the UK for VAT; Manx law there largely follows UK law. Jersey, Guernsey and Gibraltar, by contrast, are outside and have no VAT. Services to Northern Ireland have no special features, because the Northern Ireland arrangements only concern goods. Goods have their own rules, described in VAT on goods sold into the UK.
Frequently asked questions about VAT on services
I advise a UK company. Must I register in the UK?
No, as long as the customer belongs in the UK and the reverse charge applies. From 1 April 2027 that is to apply only if your customer is VAT-registered. So check now which customers have a number.
What do I put on the invoice?
A precise description of the service and your customer's UK VAT number, which is also your best evidence that it is a business. You show no UK VAT; your customer accounts for the tax.
My UK customer has no VAT number. What then?
If it cannot otherwise show that it is a business, treat the supply as B2C. If it is an unregistered business, the reverse charge still applies today; after the announced change from April 2027 you would have to account for the VAT yourself.
I am holding a seminar in London. Which rule applies?
If you sell tickets to businesses, admission is taxable in the UK and registered UK customers account by reverse charge. If you sell to private individuals, the service is taxable in the UK, and you must register.
Sources: GOV.UK: Place of supply of services (VAT Notice 741A); GOV.UK: VAT rules for supplies of digital services to consumers; GOV.UK: Refunds of UK VAT for non-UK businesses (VAT Notice 723A); GOV.UK: Budget 2026
