UK VAT on invoices for freelancers and agencies
The UK standard VAT rate is 20%. A UK business selling services to a business customer abroad generally does not charge UK VAT, because the place of supply is where the customer belongs; selling to a consumer abroad, it generally does. HMRC Notice 741A lists exceptions to both rules.
Last reviewed 10 November 2026 by ReckonOS research (source check; not yet reviewed by an accountant).
Estimates based on the rules for the United Kingdom as of 10 November 2026. Check with your accountant. Each section below links to the official source it is based on, with the date we checked it. This page is research, not tax advice.
The standard rate
GOV.UK lists the standard rate as 20% for most goods and services. Section 2(1) of the VAT Act 1994 sets VAT at 20 per cent.
Sources: GOV.UK: VAT rates (opens in a new tab) (checked 5 November 2026); VAT Act 1994, section 2 (opens in a new tab) (checked 5 November 2026).
Selling services abroad: business or consumer
Section 7A says a supply of services to a relevant business person is made in the country where the recipient belongs; otherwise it is made where the supplier belongs.
HMRC Notice 741A puts it as two general rules: business-to-business services are supplied where the customer belongs, consumer services where the supplier belongs. Some services, such as those relating to land, follow other rules.
Sources: VAT Act 1994, section 7A (opens in a new tab) (checked 5 November 2026); HMRC: VAT Notice 741A (opens in a new tab) (checked 5 November 2026).
Buying services from abroad
Under section 8, when a UK business receives services from a supplier who belongs outside the UK, it accounts for the VAT itself as if it had made the supply: the UK reverse charge.
Sources: VAT Act 1994, section 8 (opens in a new tab) (checked 5 November 2026).
What ReckonOS does with these rules
- Adds VAT at 20% for UK clients, and for a UK supplier billing a business abroad prints the outside-the-scope wording instead.
- Checks UK VAT numbers with HMRC and EU numbers with VIES before applying a business-to-business treatment.
- Reserves the VAT inside each payment in full in the Tax Reserve Vault estimate.
- Does not submit returns to HMRC Making Tax Digital.
Other countries
United States · European Union · Germany · Belgium · Canada · Australia · Nigeria
Questions
Do I charge UK VAT to a client in the US?
For a business client, generally no: the place of supply is where the customer belongs, so the invoice is outside the scope of UK VAT. For a consumer, generally yes. Notice 741A lists exceptions, so check with your accountant.
What is the UK standard VAT rate?
20%, set by section 2 of the VAT Act 1994.
See the tax to set aside from every payment.
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