What is the place of supply for a UK solicitor advising a US business on a UK commercial contract?

If the advice does not relate to land, the place of supply is where the client belongs (the US). The supply is B2B, so no UK VAT is charged. You must hold evidence of the client's business status, such as a US tax ID or company registration number. If the advice relates to UK land (e.g., a property dispute), the place of supply is the UK and UK VAT applies at 20%.

Do I charge VAT on legal fees for a private client living in France?

Generally no. Legal services are a listed category in VATA 1994 Schedule 4A paragraph 16, so where the private client belongs outside the UK the place of supply is the client's country (France) and the supply is outside the scope of UK VAT. You still keep evidence of where the client belongs. The main trap is land, because if the work relates to a specific piece of UK land, such as conveyancing on a UK property, Schedule 4A paragraph 1 puts the place of supply in the UK and 20% UK VAT is due whoever the client is.

Does the land exception apply to all conveyancing work?

The land exception applies to services that directly relate to a specific piece of land. This includes conveyancing, property litigation, and lease negotiations. However, services that merely touch on land (e.g., general corporate advice about a property-holding company) may not qualify. HMRC's guidance is narrow. If in doubt, seek specialist VAT advice. For conveyancing on UK land, the place of supply is always the UK, even for B2B overseas clients.

VAT & Compliance

How Does VAT Apply to Overseas Clients for a UK Law Firm?

18 May 2026Accounts for Lawyers Editorial Team8 min read

A UK law firm must determine whether VAT applies to overseas clients by applying the place of supply rules in VATA 1994 s.7A and Schedule 4A. The key distinctions are whether the client is a relevant business person, where the client belongs, and whether the service relates to land. This guide explains the rules with worked examples for solicitors.

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Key takeaways

VAT on overseas clients turns on the place of supply rules, driven by whether the client is a business (B2B) or a consumer (B2C).
For B2B services not relating to land, VATA 1994 s.7A(2)(a) puts the place of supply where the client belongs, so no UK VAT is charged on an overseas business.
For B2C legal services to a client belonging outside the UK, VATA 1994 Schedule 4A paragraph 16 moves the place of supply to the client's country, so the supply is outside the scope of UK VAT and no VAT is charged.
For B2C legal services to a client belonging in the UK, the supplier rule in VATA 1994 s.7A(2)(b) applies and 20% UK VAT is due.
Services relating to a specific piece of land are taxed where the land sits, so UK conveyancing always carries 20% UK VAT.
For a no-VAT B2B treatment, hold evidence of business status such as a VAT or company registration number, verified via VIES for EU clients.

Why Place of Supply Matters for Your Law Firm

If your UK law firm acts for a client based outside the United Kingdom, you cannot simply assume the work is outside the scope of VAT. The tax treatment depends on the place of supply rules set out in UK VAT law (implementing the EU Principal VAT Directive, as retained post-Brexit). Getting this wrong can mean undercharging VAT and facing an HMRC assessment, or overcharging VAT and losing a competitive advantage.

For a solicitor or law firm, the core question is: where is the supply of your legal services treated as taking place? If the place of supply is the UK, you must charge UK VAT at 20% (unless an exemption applies). If the place of supply is outside the UK, the supply is outside the scope of UK VAT, and you do not charge VAT.

This article explains the rules for B2C overseas and B2B overseas legal services, with worked examples. It also covers the interaction with the place of supply rules for solicitors handling cross-border work, including the Schedule 4A overrides for land and for consultancy-type services supplied to overseas private clients.

The Basic Rule: B2B vs B2C

UK VAT law distinguishes between supplies to a business customer (B2B) and supplies to a non-business customer (B2C). The distinction is critical because the place of supply rules differ.

B2B Supplies (Business to Business)

For legal services supplied to a relevant business person, the general rule in VATA 1994 s.7A(2)(a) puts the place of supply where the customer belongs. If your client is a business established outside the UK, the place of supply is outside the UK, the supply is outside the scope of UK VAT and you do not charge UK VAT. The customer accounts for the tax under its own reverse charge if its country operates one. You still report the supply on your VAT return as an outside-the-scope supply, and you keep evidence of both the customer's business status and its place of belonging.

However, you must obtain and retain evidence that the client is a business. HMRC expects you to hold the client's VAT registration number (if they have one), or other commercial evidence such as a company registration number, business letterhead, or a signed statement from the client confirming their business status.

Example: A UK law firm advises a German GmbH on a commercial contract. The German company provides its VAT number (DE123456789). The supply is B2B, place of supply is Germany. The UK firm does not charge VAT. The German client may account for VAT in Germany under the reverse charge mechanism.

B2C Supplies (Business to Consumer)

For legal services supplied to a person who is not a relevant business person, the starting point in VATA 1994 s.7A(2)(b) is that the place of supply is where the supplier belongs. Where your UK firm acts for a private client who also belongs in the UK, the place of supply is the UK and you charge UK VAT at 20%.

That supplier rule is overridden where the private client belongs outside the UK. VATA 1994 Schedule 4A paragraph 16 treats a listed category of services, which includes legal services along with consultancy, accountancy, advertising and data processing, as supplied where the customer belongs when the customer belongs outside the UK and is not a relevant business person. The consequence is that B2C legal work for an overseas private client is outside the scope of UK VAT, and no UK VAT is charged.

Because the supply would be taxable if it were made in the UK, input tax attributable to it remains recoverable in the ordinary way. Being outside the scope on these grounds does not restrict your input tax.

Example: A UK law firm advises a private individual resident in France on a contractual dispute with no UK land element. The client is a private individual (B2C) belonging outside the UK. Schedule 4A paragraph 16 applies, the place of supply is France, and the supply is outside the scope of UK VAT. On a fee of £5,000 the firm invoices £5,000 with no VAT, and marks the invoice "Outside the scope of UK VAT". Had the same client belonged in the UK, the fee would have carried VAT of £5,000 x 20% = £1,000, giving £6,000 gross.

Special Rules for Legal Services: The "Services Relating to Land" Exception

There is an important exception for services relating to land, set out in VATA 1994 Schedule 4A paragraph 1. If your legal services relate to a specific piece of land, the place of supply is where the land is located, regardless of whether the client is B2B or B2C and regardless of where the client belongs. This is the override that catches conveyancers who assume all overseas work escapes UK VAT.

For a UK solicitor handling a conveyancing transaction for a UK property, the land is in the UK. The place of supply is the UK. You charge UK VAT, even if the client is an overseas business.

Example: A UK law firm handles the purchase of a London flat for a Hong Kong company. The land is in the UK. The place of supply is the UK. The firm charges 20% UK VAT, even though the client is an overseas business.

If the land is outside the UK, the place of supply is outside the UK. No UK VAT is charged.

Example: A UK solicitor advises a UK client on the purchase of a villa in Spain. The land is in Spain. The place of supply is Spain. The UK firm does not charge UK VAT. The client may need to account for Spanish VAT or equivalent tax.

Practical Steps for Your Law Firm

To apply the correct VAT treatment, follow these steps for each overseas client engagement:

Identify the client type: Is the client a business (B2B) or a private individual (B2C)? Obtain evidence of business status for B2B claims.
Determine the nature of the service: Does the service relate to land? If yes, the place of supply is where the land is located.
Apply the place of supply rule: For B2B services not relating to land, the place of supply is where the client belongs (s.7A(2)(a)). For B2C services not relating to land, the place of supply is where your firm belongs (s.7A(2)(b)) unless the client belongs outside the UK, in which case Schedule 4A paragraph 16 moves it to the client's country.
Document your reasoning: Keep a clear record of your VAT treatment decision, including the evidence you relied on. This is essential for HMRC compliance.
Issue the correct invoice: If no UK VAT is chargeable, issue an invoice stating "Outside the scope of UK VAT" or "Reverse charge applies" (for B2B supplies to EU businesses). If UK VAT is chargeable, show the VAT amount.

For further guidance on VAT compliance for your law firm, see our services page for a full overview of our legal-sector accounting support.

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Worked Examples for Solicitors

Example 1: B2B Overseas Legal Advice (No Land Element)

A UK law firm provides corporate advice to a Canadian company. The advice does not relate to any specific land. The client is a business (B2B). The place of supply is Canada (where the client belongs). No UK VAT is charged. The firm holds the client's Canadian business number as evidence.

Example 2: B2C Overseas Client (Estate Administration)

A UK solicitor is instructed by a private individual who belongs in Australia to administer a UK estate. The client is a private individual (B2C). The work is not a service "relating to land" in the narrow VAT sense, because it is the administration of an estate rather than advice on a specific property. Schedule 4A paragraph 16 applies, the place of supply is Australia, and the fee is outside the scope of UK VAT. The firm charges no UK VAT and retains evidence of where the client belongs. If the retainer later extends to conveying a UK property in the estate, that element is land-related under Schedule 4A paragraph 1 and carries 20% UK VAT.

Example 3: B2B Overseas Client (UK Conveyancing)

A UK law firm handles the sale of a UK commercial property for a Singapore company. The land is in the UK. The place of supply is the UK, regardless of the client being B2B. The firm charges 20% UK VAT.

Example 4: B2C Overseas Client (Foreign Will)

A UK solicitor drafts a will for a client whose usual residence remains the UK while they are temporarily working in Dubai. The client is a private individual (B2C) who still belongs in the UK, so Schedule 4A paragraph 16 is not in point. The place of supply is the UK under s.7A(2)(b) and the firm charges 20% UK VAT. Belonging, not a temporary address, is what decides this, so record the basis on which you concluded the client belongs in the UK.

Common Pitfalls for Law Firms

Several errors recur in practice. Avoid these:

Assuming every private client attracts UK VAT: a private client belonging outside the UK is covered by Schedule 4A paragraph 16, so the supply is outside the scope. Charging 20% on it is an overcharge you will have to correct.
Assuming all overseas clients are outside VAT: land-related work is decided by where the land is, so UK conveyancing carries 20% UK VAT whoever the client is and wherever they belong.
Failing to evidence where the client belongs: the paragraph 16 treatment depends on belonging outside the UK, so a contract address alone is thin. Hold the same quality of record you would for a B2B claim.
Failing to obtain B2B evidence: HMRC can challenge a no-VAT treatment if you cannot prove the client is a business.
Misapplying the land exception: Not all services that touch land are "services relating to land" for VAT purposes. HMRC's guidance is narrow. If in doubt, seek specialist advice.
Ignoring post-Brexit changes: Since 1 January 2021, supplies of services to EU businesses are treated the same as supplies to non-EU businesses. The reverse charge still applies, but you must check the client's VAT number validity.
Forgetting to account for VAT on disbursements: If you incur costs on behalf of an overseas client (e.g., search fees, SDLT), the VAT treatment of those costs may differ from your fee. Disbursements properly defined are outside the scope of VAT, but recharged expenses may be part of your supply.

Interaction with the SRA Accounts Rules

If you hold client money for an overseas client, the SRA Accounts Rules still apply. Client money must be held in a client account, and you must comply with the five-weekly reconciliation rule. VAT treatment of your fees does not change your obligations under the rules.

For more on SRA compliance, see our SRA Accounts Rules Essentials guide.

When to Seek Specialist Advice

The place of supply rules for legal services are not always straightforward. If your firm regularly acts for overseas clients, or if you are unsure about a specific engagement, consult a VAT specialist who understands the legal sector. Getting it wrong can lead to HMRC penalties and interest, as well as reputational damage with clients.

Our team at Accounts for Lawyers provides VAT compliance support for law firms. We can review your overseas client procedures and help you implement robust systems. Contact us via our contact page for a confidential discussion.

For further reading, see our guides on COFA fundamentals and COFA compliance support.

Frequently asked questions

What is the place of supply for a UK solicitor advising a US business on a UK commercial contract?: If the advice does not relate to land, the place of supply is where the client belongs (the US). The supply is B2B, so no UK VAT is charged. You must hold evidence of the client's business status, such as a US tax ID or company registration number. If the advice relates to UK land (e.g., a property dispute), the place of supply is the UK and UK VAT applies at 20%.
Do I charge VAT on legal fees for a private client living in France?: Generally no. Legal services are a listed category in VATA 1994 Schedule 4A paragraph 16, so where the private client belongs outside the UK the place of supply is the client's country (France) and the supply is outside the scope of UK VAT. You still keep evidence of where the client belongs. The main trap is land, because if the work relates to a specific piece of UK land, such as conveyancing on a UK property, Schedule 4A paragraph 1 puts the place of supply in the UK and 20% UK VAT is due whoever the client is.
What evidence do I need to treat an overseas client as B2B for VAT purposes?: HMRC expects you to hold reasonable commercial evidence. This includes the client's VAT registration number (if any), company registration number, business letterhead, or a signed statement from the client confirming their business status. For EU clients, you should verify the VAT number via the VIES system. For non-EU clients, a tax ID or equivalent is sufficient. Retain this evidence with your VAT records.
Does the land exception apply to all conveyancing work?: The land exception applies to services that directly relate to a specific piece of land. This includes conveyancing, property litigation, and lease negotiations. However, services that merely touch on land (e.g., general corporate advice about a property-holding company) may not qualify. HMRC's guidance is narrow. If in doubt, seek specialist VAT advice. For conveyancing on UK land, the place of supply is always the UK, even for B2B overseas clients.

Unsure which costs are genuine disbursements?

A payment is outside the scope of VAT only if all eight conditions in VAT Notice 700 section 25.1.1 are met, and since Brabners and Revenue and Customs Brief 6 (2020) a search fee you interpret in your own advice is part of your taxable supply. Ask a specialist to test your recharges.

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