# Do You Charge UK VAT on EU and US B2B Services? UK businesses supplying services to business clients in the EU or US generally do not need to charge UK VAT, as the place of supply is legally treated as outside the UK. **Published:** 2026-07-03 **Updated:** 2026-07-05 **Source:** https://aztajournal.com/gb/uk-vat-eu-us-b2b-services --- > UK businesses providing services to EU and US business clients do not need to charge UK VAT on most transactions. Under statutory rules, these international B2B services are treated as taking place outside the UK, meaning they are outside the scope of UK VAT. Do you charge UK VAT on services to EU and US B2B clients? No, in most cases you do not charge UK VAT because the transactions are treated as taking place outside the UK. Under UK tax law, the tax liability is determined by where your business customer is located rather than where you are based. ## Key Takeaways If you supply professional services to business clients based in the EU or the US, you should implement these compliance steps: - Confirm the business status of your client by collecting their local tax registration details. - Apply the general place-of-supply rule to treat the transaction as outside the scope of UK VAT. - Issue your invoice showing zero UK VAT and include the necessary reverse charge wording. - Retain proof of your client's commercial status in your business records for HMRC inspection. ## Do I charge UK VAT on services to EU and US B2B clients? You do not charge UK VAT on services to EU and US business clients because the place of supply is outside the UK. This treatment is governed by Section 7A of the Value Added Tax Act (VATA) 1994. According to the legislation in VATA 1994 s.7A(2)(a), a supply of services to a business customer is treated as made in the country where the recipient belongs. Because your business clients are established in the EU or the US, these services are legally supplied outside the UK. Consequently, these transactions are outside the scope of UK VAT, and no tax should be added to your invoice. ## What is the general place-of-supply rule for B2B services? The general place-of-supply rule determines which country has the right to tax a service for VAT purposes. For business-to-business transactions, the tax jurisdiction is determined by where the customer belongs rather than where the supplier is located. As outlined in HMRC VAT Notice 741A, when you sell services to an overseas business, the place of supply is the country where that business customer is established. This means your professional, digital, or consultancy services are treated as taking place in your customer's country. As a result, you do not account for UK VAT on these overseas sales. ### How do B2B VAT rules apply to EU clients post-Brexit? Services supplied to EU businesses are treated as outside the scope of UK VAT, leaving the EU buyer to account for tax locally. Since the transition period ended, the EU is treated the same as any other non-UK territory for service supplies. To process these transactions correctly, UK businesses must follow specific compliance steps: 1. Verify that the EU customer is a legitimate business entity by requesting their local VAT registration number. 2. Check the validity of the VAT number using the official European Commission database. 3. Draw up an invoice showing a zero rate of UK VAT, making sure not to apply any UK tax. 4. Add a clear reference to your invoice stating that the transaction is subject to the reverse charge mechanism. Under this framework, your EU business customer will account for any local VAT due on their own domestic tax return. This mechanism ensures that you do not need to register for VAT in individual EU member states to sell B2B services. ### How do VAT rules apply to B2B services for US clients? Services supplied to US business clients are outside the scope of UK VAT because the place of supply is the United States. You do not charge or account for UK VAT on these sales. Unlike the European Union, the US does not operate a national federal VAT system. Your US customer does not need to complete a domestic reverse charge VAT declaration for your services. However, you must still maintain records showing the client is a genuine business to justify the out-of-scope status. Note that US state sales tax rules operate independently from UK VAT legislation and do not affect your UK VAT reporting. ## What are the exceptions to the general place-of-supply rule? Certain categories of services do not follow the general place-of-supply rule and may still require you to charge UK VAT. These special rules are based on where the service is physically performed or where the underlying asset is located. The table below outlines the primary exceptions where the general B2B rule does not apply: | Service Category | Applicable VAT Rule | | --- | --- | | Services relating to land or physical property based in the UK | The place of supply is where the land is located, meaning UK VAT may apply. | | Admission to live events, exhibitions, or conferences held in the UK | The place of supply is where the event physically takes place. | | Restaurant and catering services physically carried out in the UK | The place of supply is where the services are physically performed. | | Hiring of transport for short-term use starting in the UK | The place of supply is where the transport is put at the customer's disposal. | ## What must you show on your invoice to EU and US clients? Invoices sent to international business clients must clearly show that the transaction contains no UK VAT. You must also include specific wording indicating how the tax liability is handled. According strictly to HMRC VAT Notice 741A, you must omit any charge for UK VAT on the invoice. You should add a clear statement such as: "Outside the scope of UK VAT — reverse charge may apply in the customer's jurisdiction." For EU clients, you should also include their registered VAT number on the face of the document to prove their business status. ## Can you reclaim input VAT on expenses for overseas services? Yes, UK businesses can recover input VAT on business expenses that relate directly to supplying out-of-scope international B2B services. These transactions do not restrict your right to recover input tax. Even though you do not charge VAT on your invoices to EU and US clients, these transactions are still treated as commercial business activities. Under UK VAT rules, you are permitted to reclaim VAT on goods and services you purchase to support these sales. This ensures that UK service exporters are not financially disadvantaged when competing in global markets. ## Frequently Asked Questions ### What wording do I need to put on a VAT invoice to an EU business customer? You should clearly state: "Outside the scope of UK VAT — reverse charge may apply in the customer's jurisdiction." It is also highly recommended to include your customer's valid EU VAT number on the invoice. ### Do I need to register for VAT in the EU to sell B2B services from the UK? No, you do not need to register for VAT in the EU when supplying B2B services from the UK. Under the general place-of-supply rules, the EU customer is responsible for accounting for VAT locally via the reverse charge. ### How do I prove that my US or EU client is a legitimate business for VAT purposes? For EU clients, you should obtain and verify their local VAT number. For US and other non-EU clients, you should keep commercial evidence such as trade registry extracts, business contracts, or tax registration certificates. ### Does post-Brexit VAT treatment differ between EU and non-EU B2B clients? No, post-Brexit VAT treatment does not differ. Both EU and non-EU business clients are now treated equally as non-UK customers, meaning the place of supply is outside the UK and no UK VAT applies.