UK plans overseas-services VAT change for April 2027

The planned change

HMRC’s 28 October 2026 policy note proposes restricting the overseas-services reverse charge to purchasing businesses actually registered for UK VAT. Where the UK business customer is not registered, the overseas supplier would instead charge and account for VAT. The stated operative date is 1 April 2027; businesses should distinguish this announced change from the rules for a current invoice. Official source.

Why the distinction matters

The note describes the present treatment of certain supplies to unregistered business customers and proposes amending section 8 of the Value Added Tax Act 1994. The official publication explains potential registration, invoicing and recordkeeping consequences for overseas suppliers. It does not establish that every service is taxable or that place-of-supply questions disappear.

A business customer is not necessarily VAT registered

A supplier should not equate a company registration number, business email address or commercial contract with evidence of VAT registration. Review how customer status is recorded and updated. A process that only asks whether the purchaser is a business may not capture the distinction on which the proposed treatment depends.

Check contracts as well as software

Identify whether agreed prices include tax, how changes in law are handled and who must supply registration information. Coordinate the legal review with accounting and billing-system work. For a Georgian supplier serving UK businesses, the useful question is how the particular cross-border supply is treated, not whether this UK announcement changes Georgia’s own VAT regime.

Hypothetical example

A software consultancy outside the UK sells services to two UK businesses, one VAT registered and one not. Under the planned approach, treating both invoices identically merely because both buyers are businesses could be wrong. The consultancy should examine each supply and the customer’s verified status before deciding on registration, invoicing or a price change.

Prepare without overstating the result

Preserve existing contracts, customer-status evidence and a list of affected transactions. Ask a tax adviser to check scope, exemptions, applicable supply dates and the final rules. Do not add VAT indiscriminately to every overseas invoice or promise customers that reverse-charge treatment will continue solely because it was used in the past.

Legal check date

Sources and law checked on 29 October 2026. Later developments are not reflected automatically. Application of the rules depends on the individual facts.