As of 13 August 2026, AI can only partly calculate VAT on digital services sold by your UK business.

What to actually do

1. Hand it to a person

   The route this page recommends

   Someone with a licence or accountable authority has to sign this before it counts.

2. Use a tool built for this

   Second choice

3. Do it yourself

   The distant third

   A chat interface, chat-fluent skill, and roughly 30 minutes until you can act on the result.

   How to actually do it

   1. Open GOV.UK guidance on VAT place of supply and digital services, and save the relevant links without relying on an undated chatbot answer.
   2. Export the sales transactions for the period from your accounting or payment system, including invoice date, customer country, customer type, net amount, currency and VAT already charged.
   3. Gather evidence for each customer's location and business status, including VAT-number validation or other records, and label anything missing or uncertain.
   4. Paste the business details, transaction table and GOV.UK links into a chatbot with the supplied prompt, asking it to leave unsupported treatments unclassified.
   5. Put the AI's transaction table into a spreadsheet and recalculate each VAT amount and total from the net amounts, checking currency conversions separately where relevant.
   6. Compare every treatment and cited rule with the current GOV.UK guidance, then send ambiguous transactions and the completed schedule to a UK VAT accountant before changing invoices or using the figures in a VAT return.

   Prompt

   You are helping with a UK VAT calculation for a business selling digital services. This is not professional advice and must not be treated as a final VAT decision. Do not invent facts, VAT rates, customer locations or legal rules. Use current GOV.UK sources where available and provide the source links.
   
   Business details:
   - VAT registration status: [registered, not registered, or unsure]
   - Business establishment and VAT registration country: [details]
   - Digital service description: [describe exactly what the customer receives and how it is delivered]
   - Sales period: [period]
   
   For each transaction, I will provide:
   - Invoice or transaction reference: [reference]
   - Date: [date]
   - Customer country: [country]
   - Customer type: [business, consumer, or unknown]
   - Customer VAT number and validation evidence, if any: [details]
   - Net price and currency: [amount]
   - VAT already charged, if any: [amount and currency]
   - Evidence used for the customer's location: [details]
   
   Analyse each transaction separately. First identify the facts that are missing or uncertain. Then state the likely UK VAT treatment, the place of supply, whether VAT should be charged by my business, whether reverse charge may be relevant, and the calculation. Keep the arithmetic separate from the legal classification. Do not choose a VAT rate or treatment when the facts or current GOV.UK rules do not support it. Mark such transactions as 'needs VAT adviser review'.
   
   Return a table with these columns: transaction reference, customer type, customer location evidence, service classification, place of supply, VAT treatment, VAT rate used if confirmed, net amount, VAT amount, gross amount, source or rule, confidence, and information still needed. Add totals only for transactions with a confirmed treatment. Finish with a short list of questions and documents I should take to a UK VAT accountant before invoicing or filing.

   Open it prefilled in ChatGPT or Claude, or copy it into Gemini, which takes no prefill link.