One of our team members will reach out to you via ticket and assist you further on how to verify your location.
Regarding your VAT question, I would suggest to consult with a local specialist on how to report your earnings. Upwork charges the country-specific Value Added Tax (VAT) to freelancers and agencies in the European Union (EU), unless you provide a valid VAT number. VAT will be assessed on services provided by us, not on services you provide your clients. To learn more about VAT check out this Help Article. Thank you.
I'm in the same situation, non British living and working in the UK. Can you fix your location verification system to take actual proof of residence? You don't need to live in the UK to have a UK driving license or UK passport, and you don't need these to live in the UK.
You should be able to complete a manual location verification where you can provide a government issued photo ID and a document with proof of residence dated within 6 months.
I'll share your account with the Customer Support Team so that they can assist you further with your location verification.