VAT—the reverse charge on cross-border supplies
Produced in partnership with Michael Ridsdale of Wedlake Bell LLP
VAT—the reverse charge on cross-border supplies

The following Tax guidance note Produced in partnership with Michael Ridsdale of Wedlake Bell LLP provides comprehensive and up to date legal information covering:

  • VAT—the reverse charge on cross-border supplies
  • When does the reverse charge apply?
  • How is the reverse charge operated?
  • Impact of the reverse charge on recovery of input tax
  • Impact of the reverse charge on registration
  • When does Part 1 or Part 2 of Schedule 4A apply?
  • At what time must a recipient account for VAT under the reverse charge procedure?
  • How much VAT should be charged when operating the reverse charge?

Brexit: This Practice Note contains information on subjects impacted by the UK’s withdrawal from the EU. The Taxation (Cross-border Trade) Act 2018, and regulations made under that Act, set up a new customs and VAT regime for the UK, to apply once the UK has left the EU. The operative provisions of the Act do not take effect until the implementation period provided for in the European Union (Withdrawal Agreement) Act 2020 comes to an end. For more information, see News Analyses: Post-Brexit customs regime—the Taxation (Cross-border Trade) Act 2018 and EU Withdrawal Agreement and VAT. For more information on the withdrawal agreement and Brexit see Practice Note: Brexit—introduction to the Withdrawal Agreement and News Analysis:Brexit Bulletin—key updates, research tips and resources. For more on tax and Brexit, see Practice Note: Brexit—UK tax consequences.

As further explained in Practice Note: What is VAT?, ordinarily:

  1. an amount equal to the VAT due on a supply is paid by the recipient of the supply to the supplier under the agreement in place between them, and

  2. the supplier, in turn, is liable to account for the VAT to HMRC

The UK reverse charge is a mechanism which shifts the responsibility for accounting for VAT to HMRC from the supplier to the recipient (ie reversing the obligation).

The UK reverse charge mechanism:

  1. alters:

    1. the liability to account