Guides / EU contractors: VAT and tools · Updated 30 September 2026

EU contractors working for UK clients: VAT and tools

If your EU business sends a team to work for UK clients, you need to answer two questions before the job: where your service is taxed for VAT, and how your tools and equipment will cross the border.

This guide is also available in Polish.

Polish and other EU firms regularly send people to the UK to fit kitchens, install machinery, run IT projects, repair equipment or consult. Two separate sets of rules apply to that work. VAT decides where the service is taxed and who accounts for the tax. Customs decides what happens to the tools, instruments and equipment your team takes across the border. Get either wrong and you can end up with an unexpected UK VAT registration or duty charged on your own van-load of kit.

Step one: is your client a business or a consumer?

HMRC's place of supply rules, set out in VAT Notice 741A, start with one question: who is the customer? The notice distinguishes business-to-business (B2B) supplies from business-to-consumer (B2C) supplies, and the answer changes where the service is treated as supplied.

• B2B – as a general rule, services are supplied where the customer belongs, wherever the supplier is based.
• B2C – as a general rule, services are supplied where the supplier belongs, wherever the customer is.

Notice 741A also explains that customers with both business and non-business activities, such as charities, local authorities and government departments, count as business customers. A UK VAT registration number is usually good evidence that your client is in business. If you have no clear evidence of business activity, HMRC's guidance is to treat the customer as a consumer. In practice, ask your UK client for their VAT number before you invoice and keep it on file.

B2B: the reverse charge

Where the general B2B rule applies and your client is a UK VAT-registered business, the service is supplied in the UK, but you do not charge UK VAT. Instead, the customer uses the reverse charge: according to Notice 741A, they account for the VAT on their own return by entering output tax and, subject to the normal rules, reclaiming it as input tax. For you as the EU supplier, this usually means no UK VAT on the invoice and no UK VAT registration for that supply.

Your invoice should make clear that the customer accounts for the VAT. Check your home-country invoicing and reporting rules as well; this guide covers the UK side only.

The big exception: services connected with land

The general rules do not help most construction and installation contractors. Notice 741A (section 7) has a special rule for services that relate directly to a specific site of land or buildings: they are supplied where the land is. It gives construction and building works as an example. That rule applies whatever the status and location of the parties.

So if your crew is renovating a house in Birmingham or building an extension for a UK company, the supply is made in the UK because the property is there, and the B2B/B2C analysis above does not decide the matter. Whether a particular job counts as land-related depends on the detail of the work, and Notice 741A lists examples on both sides of the line. Read section 7 carefully before quoting.

When a UK VAT registration is needed

Notice 741A (section 2.6) states that there is no registration threshold for non-established businesses making taxable supplies of services in the UK. The UK's normal turnover threshold does not protect an EU firm with no UK establishment. If you make a taxable supply in the UK and the reverse charge does not apply, you need to register for UK VAT.

The situations most likely to trigger registration are:

• land-related work (construction, installation into buildings, repairs to property) for private householders in the UK;
• land-related work where the customer does not account for VAT under the reverse charge;
• any other service supplied in the UK under a special rule where the customer cannot or does not reverse-charge.

If registration applies, it applies from your first taxable UK supply, so decide before the job starts, not after the invoice is issued. If you are unsure, check whether you need a broker for the customs side and a tax adviser for the VAT side.

Tools and equipment: the customs side

VAT on your service is one question. Customs on your equipment is another. Since the UK left the EU, tools, instruments and machines travelling from Poland to the UK are imports, even if you own them and plan to take them home. Without a relief, import duty and import VAT can be charged on them.

Temporary Admission

HMRC's Temporary Admission procedure lets goods be imported into the UK and then re-exported without paying import duty and VAT. Goods must not be altered, although they can be preserved to keep them in condition. They must be re-exported within a set period, which the guidance says is usually up to a maximum of 24 months depending on the goods. Depending on the case, authorisation can be obtained in advance (HMRC asks for applications at least a month before you start importing), by declaration when the goods are imported, orally using form C108, or by conduct, meaning passing through customs control with the goods. Oral declarations cannot be used at roll-on roll-off ports. You also need to check whether a customs guarantee is required.

The professional equipment conditions

For professional equipment, HMRC's Temporary Admission guidance sets specific conditions. The equipment must be owned by a person established outside the UK, and imported by a person established outside the UK or by a UK-established employee of the owner. It must be used by the importer or under their supervision.

The critical point for contractors is what is excluded. Relief is not available for equipment used for industrial manufacture or packaging of goods, for exploiting natural resources, or for construction and building work, except hand tools. A power trowel, scaffolding or excavator brought over for a building job will not qualify under this heading. A case of hand tools may.

ATA Carnet

An ATA Carnet is an international customs document that can cover the same trip. HMRC's list of goods an ATA Carnet will cover includes professional equipment needed for the trade or profession of a person visiting the UK to carry out a specified task, including specially adapted vehicles. The same exclusions apply: equipment for industrial manufacture, natural resource exploitation, or construction and building work. Which route suits you depends on the goods, the trip and how often you travel.

If your equipment does not qualify for any relief, it has to be imported and cleared normally on a CDS import declaration. Plan for that before the van reaches the port, together with an EORI number if you need to make declarations yourself.

A short pre-job checklist

• Is the client a business (VAT number on file) or a private individual?
• Does the work relate directly to a specific UK property or site?
• If the service is supplied in the UK, will the client account for VAT under the reverse charge? If not, do you need UK VAT registration?
• Which tools and equipment are going, who owns them, and what will they be used for?
• Does the kit qualify for Temporary Admission or an ATA Carnet, or will it need a full import declaration?
• Can you show that everything came back out again, within the time limit?

For how the procedure applies in practice, Easy Clearance's article explaining how Temporary Admission works for EU equipment is a useful next read. Always check the details against the current gov.uk guidance.

Related guides

• ATA carnets for trade fairs, samples and professional equipment

• Direct vs indirect customs representation in the UK

• Taking work tools and equipment to a UK job: temporary admission

Sources

• Place of supply of services (VAT Notice 741A) (GOV.UK)
• Check if you can get import duty relief on goods using Temporary Admission (GOV.UK)
• Apply to import goods temporarily to the UK (GOV.UK)
• Find out which goods an ATA Carnet will cover (GOV.UK)

General information, not legal, tax or customs advice. Rules change; confirm current requirements on gov.uk or with a registered agent before you ship.