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 practice 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?
  • Example
  • How is the reverse charge operated?
  • Impact of the reverse charge on recovery of input tax
  • Impact of the reverse charge on registration
  • The recipient
  • The supplier
  • 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?
  • More...

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 for VAT to HMRC, and

    2. in certain circumstances, the timing of the liability to account to HMRC, but

  2. does not change:

    1. the place of supply, or

    2. the amount of VAT due

This Practice Note explains:

  1. when the UK reverse charge mechanism on cross-border supplies applies, and

  2. how it works

This Practice Note does not cover the special rules that apply a reverse charge to:

  1. certain supplies of gas, electricity, heating or cooling

  2. supplies of certain goods and services at risk of fraud, eg mobile telephones, computer chips, carbon emission allowances, gas and electricity, wholesale telecom services and renewable energy certificates, and

  3. supplies of certain services to VAT groups

  4. supplies of construction services for which, see Practice Note: VAT—the reverse charge for building work

  5. low value goods supplied from abroad for which, see Practice Note: VAT—online marketplaces and direct online

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