The United Kingdom requires Upwork to collect a 20% VAT on services like Marketplace and Recruiter Fees. Clients can avoid having this tax collected by Upwork by providing a valid UK VAT ID. VAT charges may adjust with location or account changes, and exemptions may apply. Always consult a tax advisor for personalized guidance.
What's the United Kingdom VAT and why does Upwork collect it?
Value-added tax, or VAT, is a tax on goods or services, including our services to you, and the United Kingdom requires Upwork to collect it and send it to the government of the United Kingdom unless you provide a valid VAT ID.
We’re required to comply with the tax laws of countries where we do business to operate there.
Examples of services VAT applies to in the UK
- Marketplace Fee
- Contract Initiation Fee
- Featured Job Post Fee
- Conversion Fee
- Recruiter Fee
Since we charge tax when your government requires it, this tax may change or apply to additional services in the future.
What's the United Kingdom VAT tax rate?
The UK VAT rate is 20% of the cost of the service being taxed. Example: On $100 USD in Client Marketplace Fees, you'll pay $20 in tax, for a total of $120.
You’ll see the estimated amount of tax when you check out and on your invoices and transaction history.
Providing your United Kingdom VAT ID
- If you provide a valid VAT ID to Upwork in you Tax information, we will not have to collect this tax from you
- We’ll check whether the VAT ID you provide is valid and provide you a prompt response. You can also see your VAT ID status on your Tax information page
- The VAT ID you provide displays on your invoices. To change what displays there, you'll need to update your VAT ID
What's the UK VAT ID format?
Your UK VAT ID number is a unique ID — not your tax ID — that you may request from your government by registering for VAT in the UK. It has 9 or 11 alphanumeric characters that start with a country code of GB or XI and may look like this, for example: GB123456789, XI123456789, or 123456789
To learn more, visit the United Kingdom’s tax authority website.
Are there any exemptions to the UK VAT?
Location-related exemptions for the United Kingdom are addressed on our platform. For other exemptions, you may be able to claim a credit for taxes paid. Please consult with a tax advisor.
Changing your location or information
If you update your tax residence in your Tax information, we'll automatically adjust your VAT based on your new country's rates, if any.
You may have to revalidate your VAT ID when you change locations, or if you make other changes to your information, such as changing your legal name.
Disclaimer:
This article is for general information only and should not be considered tax advice. It may not be updated in real time and may not reflect recent changes. We strongly encourage you to consult your country’s tax authority or your tax advisor with questions related to your specific situation.
Frequently Asked Questions
Your country’s VAT applies to services we provide to both freelancers and clients if they reside, have a permanent address, or are established in your country and have not provided us with a valid VAT ID.
No, but if you do not provide a valid VAT ID, we're required to charge you VAT and remit it to your government.
If you provide a valid VAT ID, we will not be required to collect the tax. To enter your VAT ID, go to your account’s Tax information.
We're still required to collect VAT even if you're only residing in a country temporarily. If you move to another country, you can update your tax residence in your Tax information. We’ll automatically adjust your VAT to correspond with the rates in your new country of residence or stop collecting if there is no VAT, or a similar tax, in your new country.
No, we remit that money directly to your government and will not be able to refund it. You may be able to claim a credit with your tax authority for what you paid. We recommend that you consult with your government’s tax authority or your tax advisor for more information.