VAT on services from abroad

If your business buys services from outside the UK a rule called the ‘reverse charge’ applies.

  1. Convert the value of the services into sterling.

  2. Calculate the amount of VAT due and include this in your VAT Return.

  3. Credit your VAT account with the amount of VAT due (as if you had supplied the services).

  4. Debit your VAT account with the amount of VAT due.

This means there will be no tax for you to pay, unless your business is partially exempt from paying VAT.

If you’re selling services to non-business customers in EU countries, you’ll need to charge VAT at the usual rate.

Exceptions

There are different rules for some types of service, including:

  • hiring transport
  • land and property services
  • ‘electronically supplied services’ where there’s nobody directly involved in providing them (for example web hosting or music downloads)
  • events
  • restaurant or catering services