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How to get paid by international clients from the UK

By FastBuySale Newsroom · 9 Nov 2026 · 6h ago

Why international clients need extra care

Working for clients in the US, EU and beyond can raise your income and spread risk. But payments cross borders and currencies, which means fees, exchange rates and longer delays, plus VAT and tax rules that differ from domestic work. This guide sets out the process for UK freelancers and small businesses, using HMRC's VAT place-of-supply guidance and general information about payment methods.

Step 1: agree terms before you start

Put the fee, currency, payment method, due date, who pays transfer charges and late payment terms in writing. For new clients or large projects, ask for a deposit and milestone payments. Contracts should also state which country's law applies; many UK freelancers choose the law of England and Wales or Scotland.

Step 2: choose a currency

Invoicing in pounds moves the currency risk to the client. Invoicing in dollars or euros may win work but leaves your sterling income exposed to exchange rate moves. If you invoice in a foreign currency, decide whether to convert immediately or hold the currency for future costs in that currency.

Step 3: choose a payment method

International bank transfers via SWIFT are widely accepted but can involve fees from sending, intermediary and receiving banks. SEPA transfers in euros are usually cheaper for EU clients when your account can receive them. Payment platforms are convenient but charge percentage fees and conversion margins. Multi-currency account providers give you local account details in several currencies, letting clients pay as if domestically. Freelance marketplaces handle payments but take commission.

Step 4: compare the real cost

The exchange rate margin is often the largest cost. Compare how many pounds each method would deliver for the same foreign amount. The percentage calculator on this site helps express the difference as a percentage.

Worked example: a US client

Tom, a UK developer, invoices a US client $5,000. Suppose the mid-market rate is 1.25 dollars per pound, giving £4,000. Option A: a bank wire, with a £10 receiving fee, converted by his bank at 1.29, gives about £3,876, minus £10, or £3,866. Option B: the client pays into a US dollar account with a multi-currency provider, which converts at 1.255 with a £15 fee, giving about £3,984, minus £15, or £3,969. Option B leaves Tom about £103 better off. Figures are illustrations only.

Step 5: send a complete invoice

Include your business name and address, the client's name and address, a unique invoice number, the date, a description of the services, the amount and currency, payment details including IBAN and SWIFT or BIC for bank transfers, and the due date. If you are VAT-registered, include your VAT number and, where UK VAT is not charged because of place-of-supply rules, a note explaining why, for example that the reverse charge applies in the customer's country.

Step 6: understand VAT place of supply

For VAT-registered businesses, the general rule for business-to-business services is that the place of supply is where the customer belongs. If your business customer is outside the UK, the supply is generally outside the scope of UK VAT, and you do not charge UK VAT. For services to consumers, the general rule is that the place of supply is where the supplier belongs, so UK VAT may apply, though there are many exceptions, including for certain digital services. HMRC's VAT Notice 741A sets out the rules and exceptions. Keep evidence that your client is a business located abroad.

Step 7: VAT registration threshold

VAT registration is compulsory once your UK taxable turnover exceeds £90,000 in a rolling 12-month period. Supplies that are outside the scope of UK VAT are not counted toward the threshold in the same way as taxable supplies, so international business clients can affect whether you need to register. Check how your income is classified.

Step 8: record income in pounds

For Self Assessment, convert each foreign payment into pounds. HMRC accepts reasonable methods applied consistently, such as the rate on the day you receive the money or HMRC's published monthly or yearly average exchange rates. Keep a record of each payment, the rate and the sterling value.

Step 9: report and pay tax

UK residents are taxed on worldwide income. Self-employed freelancers include foreign client income with their other trading income on their Self Assessment return, paying Income Tax and Class 4 National Insurance on profit. Limited companies include it in their accounts and Corporation Tax return. If a foreign country withholds tax on your payment, you may be able to claim foreign tax credit relief, depending on the tax treaty.

Step 10: watch for scams

Warning signs include overpayment followed by a request to send back the difference, cheques from unknown foreign businesses, requests to pay a fee to receive funds and pressure to use unusual payment methods. Report fraud in England, Wales and Northern Ireland to Report Fraud, which replaced Action Fraud in December 2025, and in Scotland to Police Scotland on 101.

Late payments from abroad

The UK's statutory late payment interest applies to contracts governed by UK law between businesses, but enforcing it against a foreign client can be hard. Deposits, milestone payments and clear terms are the best protection. Platforms with payment protection can help with new clients.

Sanctions

UK financial sanctions prohibit dealings with certain countries, entities and individuals. Banks and payment providers screen payments and may block or freeze them. Check the government's sanctions lists if working with clients in high-risk jurisdictions.

Holding foreign currency

If you hold foreign currency balances, exchange gains and losses can have tax consequences in some situations, particularly for companies. Sole traders typically record income at the conversion rate when received. Large or long-term currency holdings may need professional advice.

Working with EU clients

For EU business clients, services are generally supplied where the customer belongs, so the customer accounts for VAT in their own country under the reverse charge. Ask for the client's VAT number and keep it on file. For EU consumers, different rules apply to some services, especially digital services, which may require registration for VAT in the EU through a one-stop shop scheme. Check HMRC's guidance before selling digital services to EU consumers.

Working with US clients

US clients may ask UK freelancers to complete Form W-8BEN, which certifies that you are not a US person and can reduce or remove US withholding on certain payments under the UK-US tax treaty. Completing it does not change your UK tax position; you still report the income to HMRC. Keep a copy of every form you submit.

Using freelance marketplaces

Marketplaces collect payment from clients, take a commission and let you withdraw to a UK bank, a payment platform or a card. Withdrawal fees, currency conversion and clearance periods vary. When comparing marketplace work with direct clients, include all these costs, not just the headline commission.

Keeping clients happy across time zones

Clear communication about working hours, response times and delivery dates matters more when clients are several hours ahead or behind. State your time zone in proposals, and confirm deadlines with a specific time and time zone to avoid misunderstandings.

Records to keep

Keep contracts, invoices, payment confirmations, exchange rates used, client VAT numbers and evidence of business status for overseas clients. HMRC requires records to be kept for at least five years after the 31 January submission deadline for sole traders, and six years for companies.

Deposits and milestones

For new international clients, ask for 30 to 50 percent upfront and the rest at agreed milestones. This reduces the risk of non-payment, which is harder to pursue across borders.

Common mistakes

- Not agreeing who pays transfer fees.

- Ignoring exchange rate margins.

- Charging UK VAT on services to overseas business customers when it does not apply, or failing to charge it when it does.

- Forgetting to convert foreign income into pounds consistently.

- Incomplete bank details on invoices.

A repeatable process

For each international client: agree terms, check VAT treatment, invoice correctly, check the amount received, record the sterling value and rate and set aside tax. This article is general information and is not tax, legal or financial advice.

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