Selling consulting, design, development, or other services to clients outside the UK follows different rules than selling to UK clients — and different rules again depending on whether your client is a business or a consumer.
Last updated: June 2026
For most professional and consulting-type services (the "general rule" services — consultancy, advertising, legal, accountancy, engineering, IT, and most other professional B2B services), the place of supply is normally treated as where your customer is based, not where you are. This single principle drives almost everything else in this guide.
If you're a UK business selling general-rule services to a VAT-registered business customer outside the UK (EU or elsewhere), the sale is normally outside the scope of UK VAT. You don't charge UK VAT on the invoice. Instead, your business customer accounts for VAT themselves in their own country under the reverse charge mechanism — they self-declare both the output and input VAT on their own return, which is usually VAT-neutral for them if they have full VAT recovery.
Your invoice should still be issued correctly — typically marked "reverse charge applies" or similar, with no UK VAT added — and you should keep evidence of your customer's business status and VAT number (verified via the EU's VIES system for EU customers) to support treating the sale as B2B outside the scope of UK VAT.
This is where it differs significantly from B2B. For general-rule services sold to a consumer (not a VAT-registered business) outside the UK, the place of supply is usually still treated as where you, the supplier, are based — meaning UK VAT rules generally continue to apply, and you charge UK VAT in the normal way once you're registered and above the threshold, the same as if the customer were UK-based.
Not all services follow the "general rule" above. Some categories have their own specific place-of-supply rules regardless of B2B/B2C status, including:
| Service type | Place of supply is generally... |
|---|---|
| Digital services (B2C) | Where the consumer belongs (see our digital products guide) |
| Services related to land/property | Where the land or property is located |
| Admission to events (conferences, exhibitions) | Where the event physically takes place |
| Restaurant and catering services | Where the service is physically carried out |
| Passenger transport | Where the transport takes place, apportioned by distance |
If your business falls into one of these special categories, don't assume the general B2B/B2C rule above applies — check the specific rule for your service type.
This is a common point of confusion. Even sales that are "outside the scope of UK VAT" under the reverse charge (B2B general-rule services) still generally count as part of your taxable turnover for the purpose of assessing whether you've crossed the £90,000 UK VAT registration threshold, because they're still taxable supplies you've made in the course of business — they're just supplies where the tax is accounted for by someone else (your customer) rather than you charging UK VAT directly.
You need to establish that they're a genuine VAT-registered business — a VAT number verified via the EU's VIES system is the standard way to evidence this. Without it, HMRC may expect you to treat the customer as a consumer (B2C) by default, which could mean UK VAT should have applied.
You can generally still treat genuine non-EU business customers as B2B for place-of-supply purposes using other evidence of business status (business registration, trading address, contract terms), since VAT number verification via VIES only applies to EU businesses. Keep documentary evidence supporting the B2B treatment.
Yes, they're typically reported in specific boxes on your VAT return (as part of your total value of sales/outputs, even though no UK VAT is charged on them) — check current HMRC VAT return guidance for exactly which boxes apply, as this has changed with the transition to the newer digital return formats.
No, goods follow entirely different place-of-supply and import/export VAT rules — this general-rule reverse charge mechanism is specific to services. See our dropshipping guide for how goods work.
Given the financial stakes of getting this wrong (potentially under- or over-charging VAT across many invoices), it's worth a one-off consultation with an accountant to classify your specific service type correctly, particularly if you provide a mix of services.
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