Commentary

RCB/24/07 VAT—proposed reverse charge accounting for businesses trading in mobile telephones and computer chips

Part V16 Forms and other HMRC material

RCB/24/07 VAT—proposed reverse charge accounting for businesses trading in mobile telephones and computer chips

RCB/24/07 VAT—proposed reverse charge accounting for businesses trading in mobile telephones and computer chips

Revenue & Customs Brief, Issue 24. 20 March 2007

Who needs to read this?

Businesses buying and/or selling any of the following goods—

  1.  

    (1)     mobile telephones; and

  2.  

    (2)     integrated circuit devices, such as microprocessors and central processing units, in a state prior to integration into end user products.

Background

Business Briefs 10/06 (BB/10/06, Division V16.3) and 14/06 (BB/14A/06, Division V16.3) gave notice of the Government's intention to implement reverse charge accounting arrangements for certain goods (“the reverse charge”), subject to an EU derogation. Business Brief 19/06 (BB/19/06, Division V16.3) gave a 1commitment to provide UK business with about eight weeks notice of the implementation of the reverse charge.

On 19 March 2007 the Government announced the implementation of the reverse charge for mobile phones and computer chips with effect from 1 June 2007. The reverse charge will not apply to the other goods mentioned in the earlier business Briefs.

The purpose of this Business Brief is to—

  1.  

    (a)     provide—

  2.  
    1.  

      (i)     confirmation of the timing of the introduction of the reverse charge, and of the goods to which it will apply;

    2.  

      (ii)     guidance on the application of reverse charge accounting to mobile phone contracts;

    3.  

      (iii)     guidance, to both retailers and wholesalers, on the operation of the de minimis rules;

    4.  

      (iv)     clarification of the proposed anti-disaggregation provisions;

    5.  

      (v)     guidance to certain customers, such as charities and Local Authorities, purchasing goods for business and non-business purposes;

    6.  

      (vi)     guidance on the impact of reverse charge

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