Do I need to charge VAT on digital products or downloads I sell online?

By James Fitzpatrick, AAT licensed · Accounting Solution · Last reviewed 29 September 2026 · 3 min read

Once you are VAT-registered, you charge UK VAT on most digital products sold to UK customers: online courses, software, templates and similar. E-books are the main exception, as they have been zero-rated since May 2020. Sales to consumers abroad follow the customer's country, which is a different regime.

UK customers

• Standard rate (20%): online courses, software, templates, stock images, music and most downloads.
• Zero rate: e-books and other electronic publications, since 1 May 2020.
• Exempt or outside scope: some education supplied by eligible bodies, which does not usually cover an individual selling their own course.

Below the £90,000 registration threshold, you do not charge VAT on any of it. The threshold is tested on taxable turnover, and zero-rated e-book sales count towards it, so combine them with your other sales. See our VAT registration guide.

Consumers outside the UK

For digital services supplied to private consumers, the place of supply is where the consumer is. A UK business selling a download to a customer in France must account for French VAT, at the French rate, and hold two pieces of evidence of the customer's location, such as billing address and IP address.

A UK business has two options: register for the EU non-Union OSS scheme in one member state, or register in each country. There is no turnover threshold for non-EU businesses, so the rules can apply from the first sale, though platforms that act as the seller (such as some app stores) may handle it for you.

Sales to businesses in other countries are generally outside the scope of UK VAT, but you need evidence that the customer is in business. For physical goods, see selling to the EU.

Sources: GOV.UK: VAT rules for digital services to private consumers, GOV.UK: rates of VAT on different goods and services.