Exporting services

Guidance on great.gov.uk

Understand what a service export is

Any UK service business that operates in another country is a service exporter. The UK’s financial, creative and IT sectors are big service exporters, along with education, travel and tourism.

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Although service exporters don’t have the same challenges as moving physical goods across borders, there are many things to think about when preparing your business to operate in another country. This includes tax implications, cultural differences and hiring personnel.

Guidance on great.gov.uk

Understand VAT and taxation rules in the destination country

Understanding where you may need to pay VAT when exporting services is an important part of your export planning. Place of supply rules will determine whether you pay VAT in the UK or in the country of supply.

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Working out the place of supply for a service can often be complicated and there are various rules to consider. For most service providers, the place of supply is decided by what’s known as the ‘general rule’. But some supplies are subject to special rules that will affect their place of supply.

Guidance on GOV.UK

UK VAT considerations for service providers

All UK VAT registered businesses must charge VAT on the goods and services they sell unless they are exempt. Depending on place of supply rules, you may be able to charge zero rate on the services you export.

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If you’re in the UK and the place of supply of your service is in the UK, you charge and account for VAT according to UK VAT rules. If you’re in the UK and the place of supply of your service is in an EU country, you do not pay UK VAT. If the place of supply of your service is not in the EU, you do not have to charge EU VAT but you should include the sale on your VAT Return.