A reverse charge VAT invoice is an invoice for cross-border business-to-business services where you don't charge VAT, and your client accounts for the VAT in their own country instead. It exists because of the VAT place of supply rules, which usually treat B2B services as supplied where the client belongs. You'll meet it when a UK consultant invoices an EU business, or an EU freelancer invoices a UK business, for consultancy, marketing, design, software development and similar services.

This article covers independent consultants and small practices selling services to businesses, not to consumers. It's general information, not tax advice. Countries interpret the details differently and the rules change, so check the current guidance before you rely on it: HMRC VAT Notice 741A for the UK, and your own tax authority's guidance on the EU VAT Directive. Take professional advice if in doubt.

When the reverse charge applies

For most freelancers and small practices, the reverse charge on services applies when all of these are true:

You're supplying services to a business, not a consumer
You and your client belong in different countries
The service falls under the general B2B place of supply rule

Since Brexit, the UK and the EU run separate VAT systems. The UK has its own rules and registration threshold. EU member states share a common framework through the EU VAT Directive, with each country applying it through its own law and guidance.

Under the general rule in both systems, a B2B service is supplied where the customer belongs. That's usually the country where the client has the business establishment receiving the service.

For freelancers, this usually covers:

Business consultancy and advisory work
Graphic, web and UX design
Coaching and training delivered remotely
Software development and implementation
Marketing, SEO and other digital services

In practice:

UK consultant, EU business client: the place of supply is the client's country, so the service is outside the scope of UK VAT. You don't charge UK VAT, and the client accounts for VAT locally under the reverse charge.
EU freelancer, UK business client: the place of supply is usually the UK, and the UK client accounts for VAT under the reverse charge.

Edge cases to check first

Some services have their own place of supply rules, and HMRC's guidance tells you to check these before applying the general rule:

Services connected to land and property can be taxed where the property is
Admission to events, including in-person training, can be taxed where the event takes place
Digital services sold to consumers follow separate rules and are taxed where the consumer is

If your work falls into one of these, get local advice before you invoice.

How to decide, step by step

Check that your client is a business. Ask for their legal name, address and VAT number if they have one. A valid VAT number is the strongest evidence that you're dealing with a VAT-registered business.
Confirm where your client belongs for VAT. This is usually the country where they're established or where the office receiving your service is.
Check whether a special rule applies to your type of service, such as land, events or on-site work.
Decide the treatment. If the place of supply is the client's country under the general B2B rule, the reverse charge usually applies. If it's your own country, you charge VAT as normal if you're registered.
Issue the invoice with the reverse charge wording and no VAT charged.

Each side records the transaction differently:

You record a net sale with no VAT charged. Depending on local rules, you may still need to report the value of cross-border supplies in specific boxes on your VAT return.
Your client records both output VAT, as if they had supplied the service to themselves, and input VAT, if they can recover it. For a fully taxable business the two cancel out, but the transaction still appears on their VAT return.

The reverse charge moves the responsibility for VAT to your client. VAT is still due on the supply, which is why the wording on your invoice matters if a tax authority reviews your records.

What to put on a reverse charge VAT invoice

A reverse charge invoice looks like a normal invoice with different VAT treatment and extra wording. Under UK and EU-style rules, include:

Your business name, address and VAT number, if registered
Your client's legal name, address and VAT number
A unique invoice number and the invoice date
A clear description of the services
The net amount and the currency
VAT shown as 0.00, with a statement that the reverse charge applies

Add wording such as:

"Reverse charge: customer to account for VAT"
For EU cross-border B2B services, many advisers recommend "VAT reverse charged under Articles 44 and 196 of the EU VAT Directive", adapted to any local language requirements

Describe it as the reverse charge or as outside the scope of VAT, not as zero-rated. Zero-rating is a different treatment, and mixing the two up is a common reason for invoices to be queried.

Example

A UK marketing consultant invoices a VAT-registered German company £2,000 for remote campaign strategy work:

Supplier: UK Marketing Consultancy Ltd, UK address, UK VAT number

Customer: Example GmbH, German address, German VAT number

Description: Remote marketing strategy services, June 2026

Net amount: £2,000.00

VAT: £0.00. Reverse charge: customer to account for VAT

Invoice total: £2,000.00

The UK consultant reports a £2,000 supply with no UK VAT. The German client applies the German VAT rate to £2,000 as both output and input VAT on its own return, subject to its right to deduct.

Some EU countries recommend or require their own phrases or extra disclosures, so confirm the wording with local guidance or your accountant.

Common reverse charge mistakes

Charging VAT when the reverse charge applies. It makes you more expensive than local competitors and leads to credit notes and refunds.
Not collecting the client's VAT number. Without it, you have weaker evidence that you supplied a business.
Vague or missing wording. An invoice that shows no VAT and doesn't say why gets queried.
Treating every cross-border invoice as reverse charge without checking the place of supply rules and the edge cases.

Three habits prevent most of these:

Ask every new client for their VAT status and VAT number during onboarding, and store it with their details
Keep standard reverse charge wording you paste into every cross-border B2B invoice
Run the five steps above before you issue the first invoice to a new client in another country

Currency

The reverse charge works in any currency. Show the invoice currency clearly. If you invoice in a foreign currency, you or your accountant convert the amounts into your local currency for the VAT return, using the exchange rate your tax authority accepts.

How I handle reverse charge invoices in Kiaro

Kiaro doesn't detect reverse charge cases for you. That decision depends on the steps above, and it's yours and your accountant's to make. Once you've made it, Kiaro applies it to every invoice for that client:

Client VAT details. Store the client's legal name, billing address and VAT number, and the VAT number prints in the Bill To block of every invoice. Your own VAT ID prints from your invoice settings.
A 0% default for the client. Set the client's default VAT rate to 0, and every new invoice for them starts with no VAT.
Your wording in the notes. Paste your reverse charge statement into the invoice's notes field. Kiaro doesn't add it automatically, so keep the wording somewhere you can copy it from.
Currency per client. Set the client's billing currency once, and each invoice locks its currency when it's created.

To add the wording to a one-off invoice without setting up an account, the free Invoice Generator has an optional VAT line with a reverse charge note built in.