VAT Threshold and providing services for overseas businesses

I have not yet met the VAT Threshold but I am getting close. Recently a US company asked me to provide services for them. It is my understanding that this would be Out Of Scope for UK VAT. Does that mean it does not count towards the VAT Threshold? If this is the case, how would I deal with this in my accounts so that the threshold does not get triggered? My accounting software FreeAgent does not allow me to mark sales as Out of Scope when I am not VAT Registered.

Hi Claire B,

If you are providing services to a customer based outside the UK then these sales would be classed as being Outside the Scope Of UK Vat and so would not go towards your turnover when considering the need to register for VAT.
Please see the guidance below;
6. The place of supply rules for services
I would recommend speaking to the software provider regarding how this is accounted for as we can't advise on this.

Thank you.

The question and answer refers to services would the answr be the same if it is a supply of goods rather than the provision of services?

Hi,

If you are supplying goods overseas then they would not be outside of the scope of VAT like provision of services are. The supply would be classed as a zero rated export and would go towards your taxable supplies.

However, if you only make zero rated sales or the majority of your sales are zero rated then you can apply for an exemption to registration. Please see section 3.11 of the guidance here:

Working out whether you need to register

Thank you.

Hi, If I sell products (posters and prints) abroad and the products are made and dispatched outside of the UK do I need to count these sales towards my total turnover for VAT purposes? Many thanks

Hi Mike,
There is only a requirement to register for VAT if your taxable turnover breaches the current £90K threshold.
If you sell goods overseas and these goods are never in the UK then these supplies will be Outside The Scope of UK VAT and will therefore not go towards your turnover for VAT Registration purposes.
Thank you.

Hi, I am self employed and provide a service B2B for a company in Germany and I understand this to be outside the scope of UK VAT. These services are the sole source of income (no UK customers). I was previously advised on a different forum not connected with HMRC that as this income was over the VAT threshold, even though outside the scope of UK VAT, I was required to register for VAT which I have done. I duly complete my returns with nothing to pay from my accounting software. Was the advice possibly in error ? If it was can I unregister from VAT to simplify my accounting? Will this cause any issue when submitting my Self Assessment as the business income will be over £90,000. Thank you

Hi,
It does depend what kind of service you are supplying to the company overseas.
If you supply a general rule service then your supplies will be outside the scope and there would be no requirement to register for VAT or stay registered for VAT. You can see the guidance below:
The place of supply rules for services
If this is the case then you can cancel your VAT registration. Please see the guidance below:
Cancel your registration
Thank you.

Hi, I am a sole trader and due to begin a contract for services for a German company soon. I am a UK citizen and will supply the services within the UK, but I will invoice the German company for my services. They are VAT registered in Germany and have asked me to state “Reverse Charges” on my invoice. I understand this and the reasons for this, however, they have asked me to include my VAT number alongside theirs on the invoice. I’m not VAT registered and don’t intend to be any time soon as my turnover is well below the VAT threshold in the UK. Is this a mistake on their part? Or do I need to be VAT registered? Thank you ☺️

Hi Shelley,
You would only need to register for VAT in the UK if you are making taxable supplies over the Registration threshold.
Please see the guidance below:
3. Working out whether you need to register.
Thank you.

Thanks great, thank you 🤩

Hi, I'm a sole trader (wedding videographer) can I please ask some advise as depending on which accountant I speak with I get varying answers. I'm not VAT registered and I keep myself below the VAT theshold. My question is if I film a wedding abroad and complete all work outside of the UK does this income count towards the VAT threshold, because as far as I can see its outside the scope for UK VAT? Does it also make any difference for couples from outside of the UK getting married abroad? Thank you in advance. Sam

Hi sammoss1991,
Please see the following guidance:
12. B2C services of a professional, technical, financial, intellectual or other intangible nature supplied to customers outside the UK
If you meet this particular guidance then the Place of Supply will be where the customer belongs and not where the service takes place.
Thank you.

Hello, I can see a lot of other similar posts on here, so sorry if this is just a repeat but I want to be certain for my situation. I am self employed (sole trader) and provide B2B services. I am only supplying clients located in Australia. Do I need to register for VAT if my income goes over 90k, if all of this income is from my Australian clients? Thanks,