How VAT works for freelancers in the United Kingdom

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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.

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.

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, and we’re required to comply with the tax laws of countries where we do business.

What services does UK VAT apply to on Upwork for freelancers?

Examples of client services where UK VAT applies:

Freelancer Service Fee
Membership fee
Connects purchases

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 rate?

It's 20% of the cost of the service being taxed.

Example: On $100 USD in Freelancer Service 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 the final charge on your invoices and in your transactions.

Am I required to provide my UK VAT ID to Upwork?

No, but if you provide a valid VAT ID to Upwork in your tax information, we will not have to collect this tax from you. We'll also display it on your invoices.

How do I enter my United Kingdom VAT info?

Go to Manage finances > Tax information
Enter and save your info

Once you enter your info, 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.

What's the UK VAT ID format?

Your UK VAT ID number is a unique ID that you can request from your government by registering for VAT in the UK — not your tax ID. 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.

What if I change my location or personal information?

If you move and 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.

Who has to pay the United Kingdom VAT?

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.

Do you still collect VAT if I’m only residing in the United Kingdom temporarily?

Yes. As long as your tax residence is set to the United Kingdom, we’re required to collect them. If you move, update your tax information — we’ll adjust accordingly.

If I pay the United Kingdom VAT before I enter a valid VAT ID, will you refund that money once I enter it?

No, we remit that money directly to your government and cannot 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.