Invoicing a client based outside the UK starts with one question: where the work happens and who buys it. Business-to-business services you supply from the UK to an overseas business are generally outside the scope of UK VAT, so you invoice with no VAT added, but construction work on UK land is a UK supply no matter where the client sits, and it follows the normal UK VAT and CIS rules.
- B2B services to overseas clients: invoice outside the scope of UK VAT.
- Construction on UK land stays a UK supply, VAT and CIS still apply.
- Goods exports are zero-rated; keep proof the goods left the country.
- State the currency and rate: HMRC records are kept in sterling.
- Get the client’s overseas VAT or tax number on the invoice.
How do I invoice a client based outside the UK?
The answer splits on the nature of the supply, and getting the split right is the whole job:
| Supply type | VAT treatment | What goes on the invoice |
|---|---|---|
| Services (B2B) to an overseas business | Outside the scope of UK VAT | No VAT; customer’s details and evidence of their business status |
| Services (B2C) to an overseas consumer | Generally still UK VAT when you are the UK supplier | 20% VAT unless a specific place-of-supply rule moves it |
| Goods exported outside the UK | Zero-rated | 0% VAT, export evidence kept |
| Construction services on UK land | UK rules apply: VAT or reverse charge, plus CIS | Normal UK construction invoice |
| Digital services to EU consumers | VAT due in the customer’s country | Register for the EU VAT on e-services scheme or use an intermediary |
The first row is the one most freelancers and consultants live in: an invoice with no VAT, a clear note of why, and decent records. The last row is the trap for trades: a subcontractor for a developer registered in Ireland still invoices under UK VAT and CIS, because the work happens on British soil.
Invoicing B2B services outside the scope of UK VAT
Under the place-of-supply rules, most business-to-business services take the customer’s location: the supply belongs where the customer belongs, so UK VAT does not apply. That means:
- Invoice with no VAT charged: not zero-rated, outside the scope.
- It is good practice to state the reason on the invoice, e.g. “outside the scope of UK VAT, place of supply is the customer’s location”.
- Collect evidence of the customer’s business status: their overseas VAT number, company registration or tax ID. Keep it with the invoice.
- If the customer is VAT registered in an EU country, you may be asked for evidence so they can self-account under the reverse charge there: that is their side of the paperwork, but your invoice wording must support it.
Money still lands in your account the same way. The difference is what you tell HMRC: the income is reportable on your VAT return in the appropriate box even though no VAT is charged.
Invoicing construction and land-related work
Construction does not follow the B2B services rule. Construction services are tied to the land they are carried out on, so the supply is treated as made where the land is:
- Work on UK property for an overseas client is a UK supply. If the client is not VAT registered and not an end user under the reverse-charge rules, you charge UK VAT as normal.
- If the client is a UK-registered developer or contractor you deal with under CIS, the same CIS deduction and reverse-charge tests apply as for any UK client: see the reverse-charge scope rules.
- Work on property outside the UK is outside the scope of UK VAT, and CIS does not apply either, the deduction machinery is domestic.
So the client’s postcode never decides the VAT treatment on building work. The site’s postcode does.
What to put on an overseas invoice
Beyond the standard UK invoice fields: see the full required-fields template, overseas clients need four extras:
- The client’s legal name and overseas address, exactly as it appears in their own tax records.
- Their tax or VAT registration number, plus the country it was issued in.
- The currency and exchange rate. Invoice in their currency if you like, but show the sterling amount and the rate used, HMRC records are kept in sterling.
- A clear VAT statement. Either the UK VAT charged, or the reason none was charged. An invoice that says nothing about VAT invites questions later.
Keep every exchange-rate record. When you convert foreign-currency income for your return, the rate used on the invoice date is your evidence.
Currency, banking and payment terms
- Pick the currency deliberately. Invoicing in the client’s currency makes you carry the exchange-rate risk; invoicing in sterling moves it to them. State whichever you choose on the quote, not just the invoice.
- Bank charges. International transfers can deduct fees at both ends; state on the invoice which side pays them, or you will absorb them on every payment.
- Terms. 30 days is as normal overseas as at home: payment terms wording works the same, though note the UK statutory late-payment interest regime covers contracts governed by UK law; a foreign-law contract follows its own rules.
- Chasing. Reminders work the same way: overdue invoice reminder emails can be sent unchanged to overseas clients.
Records to keep
HMRC expects you to be able to evidence why no VAT was charged. Keep, for each overseas invoice:
- The invoice and the client’s overseas tax number.
- Correspondence establishing that the customer is a business, for B2B supplies.
- Export evidence for goods: shipping documents, customs paperwork.
- The exchange rate used.
VAT records are normally kept for at least 6 years. That sounds heavy; it is a folder per client in practice, and it is exactly what turns a VAT inspection of your overseas work into a non-event.
Related questions
Do I charge VAT to a US client?
Not on B2B services: the supply is outside the scope of UK VAT and you invoice with no VAT. If you sell goods to a US customer, exports are zero-rated and you keep proof of export. Check the current US tariff and customs paperwork requirements with a freight forwarder rather than guessing.
Do I charge VAT to a client in the EU?
For B2B services, no: outside the scope of UK VAT, and the EU customer usually self-accounts under their reverse charge. For digital services to EU consumers, VAT is due in the consumer’s country under the EU’s e-services rules. For physical goods sold to EU consumers, distance-selling thresholds and VAT registration in the EU apply: that is a decision to take before you start selling, not at invoice time.
What about CIS when the contractor is overseas?
CIS applies to construction work carried out in the UK. An overseas contractor with no UK presence is generally outside the scheme, but if you are subcontracting on a UK site for a UK main contractor, CIS applies to you regardless of where the main contractor’s head office sits.
FAQ
How do I invoice a client based outside the UK?
Invoice with your standard fields plus the client’s overseas address and tax number, the currency and exchange rate, and a clear VAT statement: usually no VAT for B2B services, 20% UK VAT for consumer services, or 0% on exported goods. Keep evidence of why each treatment applied.
Do I charge VAT on services to overseas business clients?
Generally no. Business-to-business services supplied from the UK take the customer’s location, so the supply is outside the scope of UK VAT. State the reason on the invoice and keep evidence of the customer’s business status.
Do I charge VAT for construction work for an overseas client?
Yes, where the work is on UK property. Construction follows the location of the land, not the client’s address, so UK VAT, reverse-charge tests and CIS all apply as they would for a UK client.
What currency should I invoice a foreign client in?
Either, but state it clearly and show the sterling equivalent with the exchange rate used, because HMRC records are kept in sterling. Decide the currency at quote stage so both sides know who carries the exchange risk.
Can I charge interest on a late-paying overseas client?
Only if the contract is governed by UK law, the Late Payment of Commercial Debts regime follows the applicable law of the contract. With a foreign-law contract, the interest rights are whatever that jurisdiction provides, so put interest terms in the contract up front.
What records do I keep for overseas invoices?
The invoice, the client’s overseas tax or VAT number, evidence of their business status, export documents for goods, and the exchange rate used. Keep VAT-related records for at least 6 years.
One last thing
The single costliest wording mistake on overseas invoices is writing “0% VAT” when the supply is outside the scope of UK VAT. The two are different treatments, and a return full of zero-rated overseas services is a correction waiting to happen. Say which one you mean, and keep the client’s tax number as the evidence for it.