United Kingdom VAT Reverse Charge Changes for Overseas Suppliers in 2027

• From 1 April 2027, the UK will apply the VAT reverse charge on services from overseas suppliers only where the UK business customer is VAT registered.
• For services supplied to unregistered UK businesses, the overseas supplier must charge and account for UK VAT instead of the customer self-accounting.
• The change means identical B2B services may have different VAT treatment depending on the customer’s VAT registration status.
• HMRC says the reform simplifies compliance and removes an advantage for overseas suppliers, while also preventing overseas-service purchases from pushing UK businesses toward VAT registration thresholds.
• The measure is expected to raise about £70 million in 2027–28 and £75 million annually thereafter, but it may create new UK VAT registration and filing obligations for overseas suppliers.

Source: vatcalc.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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