Accounting for the reverse charge in the UK

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Accounting for the reverse charge in the UK
  • Introduction
  • How should a UK business account for the reverse charge?
  • Receipt of services subject to special rules within the EU
  • Intra-group reverse charge
  • Reverse charge as an anti-fraud measure


If a UK relevant business receives a reverse charge service from a supplier located in another country, the supplier will not normally charge any VAT on the services supplied as the place of supply is the shifted to the country where the customer is located (B2B services). The supplier will need to quote a narrative on their invoice which indicates that the customer is required to account for any VAT due on the services on their behalf.

VATPOSS14000; VATA 1994, s 8

The UK business customer will be required to account for any VAT due on the services received via its UK VAT return. The procedure is called the 'reverse charge'. Since January 2010, most services provided by suppliers within the EU to business customers located in another EU member state are now considered to be reverse charge services and the customer should account for any VAT due on the receipt of these services.

When the reverse charge applies

The reverse charge will apply if the following conditions are met:

  • there is a supply of services by a person who belongs in a country other than the UK
  • the recipient is a 'relevant business person' who belongs in the UK
  • the place of supply of the services is the UK
  • in respect of certain services (discussed below), the recipient is VAT registered in the UK


It should be noted that if the UK customer is a relevant business person and is currently not registered for VAT, the value of the reverse charge services received needs to be taken into consideration when calculating whether the UK VAT registration threshold has been exceeded (see the Overview - registering for

More on Cross border supplies of services: