VAT·By Simon Jacobs, CTA · ACA·16 July 2026·5 min read

VAT when your agency has overseas clients

In short: Do you put VAT on an invoice to a client in the US or the EU? For most agency services the answer turns on where your client belongs, not where you are.

One of the most common questions we get from agencies with international clients is simple to ask and easy to get wrong: do you put VAT on an invoice to a client in the US, or the EU, or anywhere outside the UK? For most agency services the answer turns on where your client belongs, not where you sit.

The general rule: where your client belongs

For services supplied to a business customer, the general place-of-supply rule treats the service as supplied where the customer belongs, not the supplier. HMRC sets this out in VAT Notice 741A. So for a UK agency invoicing an overseas business, the supply is generally outside the scope of UK VAT. It is a general rule with exceptions, so the honest answer is that it depends on your specifics, and we check your position rather than assume.

Do you charge VAT to a US client?

Generally not, for the typical case of marketing or consultancy services sold to a US business. Because the customer belongs outside the UK, the supply is usually outside the scope of UK VAT, so no UK VAT is added. You still keep evidence of where the client belongs and that they are in business. Whether it is that simple depends on exactly what you supply and to whom, which is what we confirm.

Do EU companies charge VAT to UK customers?

Since the UK left the EU, an EU supplier selling services to a UK business generally does not charge its local VAT. Instead the UK customer usually accounts for it under the reverse charge, explained in HMRC's guide to VAT on services from abroad. It works the other way too: your UK agency buying services from abroad may need to apply the reverse charge on its own return.

Consultancy and other B2B services

Consultancy, marketing, and most professional business-to-business services follow the same place-of-supply logic: to a UK business client they are standard-rated UK VAT once you are registered, and to an overseas business client they are generally outside the scope. Rebilled ad spend and media add another layer, because pass-through costs and platform charges need handling on their own terms.

Where it stops being general

Business versus consumer matters, digital services have their own rules, and the exact nature of what you supply can change the treatment. Getting it wrong cuts both ways: charge VAT you should not have and you overcharge clients, miss VAT you should have accounted for and you carry a liability. This is exactly what a specialist agency accountant is for. We look at your client mix and tell you the position rather than leaving it to a guess.

The short version: for most agency services, VAT follows where your client belongs, not where you are. The longer version is specific to your invoices, and worth getting right. If overseas clients are a real part of your income, talk to us and we will map the VAT position across your client base.

Common questions

Generally not, when the client is an overseas business. The place-of-supply rules treat most agency and marketing services as supplied where the business customer belongs, so a UK agency invoicing an overseas business is usually outside the scope of UK VAT. The exact treatment depends on your specifics, which we check.

Usually not for services sold to a US business. Because the customer belongs outside the UK, the supply is generally outside the scope of UK VAT, so no UK VAT is added, though you keep evidence of where the client belongs. Whether it is that clean depends on exactly what you supply.

Since Brexit, an EU supplier generally does not add its local VAT when selling services to a UK business. Instead the UK customer usually accounts for the VAT under the reverse charge on its own return. The same reverse-charge logic applies when your UK agency buys services from abroad.

Consultancy to a UK business is generally standard-rated UK VAT once you are VAT registered. Sold to an overseas business, the same service is usually outside the scope under the place-of-supply rules. The treatment follows where the client belongs, so your client mix decides the answer.