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Why Do I Have to Pay VAT on UpWork?

Last updated on September 29, 2022 @ 10:30 pm

As a freelancer, you are considered to be self-employed. This means that you are responsible for paying your own taxes, including Value-Added Tax (VAT). When you register for VAT, you will be given a VAT number, which you will need to include on all of your invoices.

In most cases, you will charge VAT on all of your services. However, there are some exceptions, such as when you are providing services to businesses outside of the EU.

You can find more information about this on the HMRC website.

PRO TIP: If you are an Upwork client, you may have noticed that your freelancers are now required to charge you VAT. This is because the UK government has decided that all digital services provided by non-EU based companies to UK customers are subject to VAT.

As a result, if you are based in the UK and you use Upwork to hire freelancers from outside of the EU, you will now be required to pay VAT on their services at the standard rate of 20%. This VAT will be charged by Upwork and will be added to your invoices.

If you are not based in the UK, you will not be affected by this change.

UpWork does not charge VAT on your behalf, so it is your responsibility to ensure that you are registered for VAT and that you include your VAT number on your invoices.

If you have any questions about VAT or other taxes, we recommend that you speak to an accountant or tax advisor.

Why Do I Have to Pay VAT on UpWork?

As a freelancer, you are considered to be self-employed.

Kathy McFarland

Kathy McFarland

Devops woman in trade, tech explorer and problem navigator.