An overseas address does not automatically mean you should remove UK VAT from an invoice. The answer depends on what you supply, who receives it, where the transaction is treated as taking place and what evidence you hold.
In this article
- Identify the customer and location
- Describe the goods or services
- Check the applicable VAT treatment
- Keep evidence and issue the invoice
Resolve those questions before agreeing a final price. Discovering an unexpected tax obligation after signing a contract can leave uncertainty about who bears the cost and what the customer needs from your invoice.
First, describe the actual supply
Write a plain description of the goods or services, rather than starting with the customer’s country. “Consultancy” could mean general business advice, work connected with a property or admission to an event. A physical product bundled with installation can raise different questions from a product shipped on its own.
For goods, identify where they start, where they finish and who transports them. Distinguish Great Britain from Northern Ireland where relevant. For services, identify the nature of the work and which customer establishment receives it.
Create a transaction summary before asking for advice. Include the contract, delivery arrangements, customer information and any platform involved. A useful summary allows the treatment to be reviewed without reconstructing the sale from scattered emails.
Establish whether the customer is a business
Services can follow different rules for business customers and consumers. Under the general rules, business-to-business services are supplied where the customer belongs; business-to-consumer services are supplied where the supplier belongs. There are important exceptions. HMRC’s place-of-supply guidance explains these rules and the evidence of customer status.
Collect the legal customer name, address and available business registration information. A VAT number may help, but do not assume that every overseas business has one or that a number resolves every question. Consider whether the service is being received for a business purpose and which establishment is most closely connected with it.
The person who pays is not always the person receiving the service. A parent company settling a subsidiary’s invoice, for example, warrants a closer look at the contracting parties.
Check for an exception before using a general rule
Land-related services, events, transport, digital services and other categories can have specific place-of-supply rules. A standard invoice setting called “overseas customer” cannot evaluate the contract for you.
| Question | Information to gather |
|---|---|
| Does the work concern land? | Property location and precise nature of the work |
| Is an event involved? | Event location and whether you sell admission or another service |
| Is delivery digital? | Whether delivery is automated and what human involvement exists |
| Are goods involved? | Dispatch point, destination, transport evidence and terms |
| Are several establishments involved? | Which establishment contracts for and receives the supply |
If the place of supply is outside the UK, that can mean no UK VAT is chargeable, but overseas tax obligations may remain. It is not the same classification as a UK zero-rated sale. HMRC explains this distinction in Notice 741A.
Goods need transport evidence
Export zero-rating is subject to conditions and evidence requirements. Keep commercial documents alongside evidence that the goods actually left the relevant territory. An overseas billing address or a customer’s assurance is not enough on its own. Consult VAT Notice 703 for export conditions and deadlines.
Agree who will obtain transport evidence and what happens if it is missing. If a customer arranges collection, you may need extra coordination. Record dispatch references against invoices so the evidence is easy to retrieve during review.
Northern Ireland movements involving the EU require their own analysis. Use HMRC’s Northern Ireland and EU goods guidance instead of treating all UK exports as identical.
An illustrative comparison
Imagine a UK marketing agency discussing two overseas projects. One is general marketing advice for an established overseas business. The other is a paid ticket for a physical event. This example is illustrative.
The agency gathers business-status evidence and considers the general business-to-business rule for the advice. It separately reviews the event admission rules rather than copying the first invoice’s VAT code. The projects share a customer country but have different facts requiring separate decisions.
The owner keeps a short record of the reasoning, supporting evidence and approved invoice wording. Staff can then apply the decision consistently to repeat transactions, while escalating changes in the work or customer arrangements.
Turn the decision into an invoicing control
Once treatment is agreed, set the correct code in your software, confirm any required wording and check how the transaction feeds into VAT reporting. Do not merely replace VAT with zero and assume the return will classify it correctly.
Revisit the decision if customer status, destination, contract or service changes. Set a review point for new countries and new product types. Where foreign registration or local compliance might arise, arrange suitable specialist advice rather than assuming UK return support includes it.
To discuss the UK VAT records and questions arising from overseas sales, contact EPOS Accountancy’s VAT service. Bring a sample contract and invoice, customer details and delivery evidence. The scope of any international or specialist work should be confirmed before proceeding; see pricing for fee information.