V16.923 VAT—reverse charge for purchases and sales of mobile phones and computer chips
Information Sheet 6/07, April 2007
This Information Sheet explains a new VAT accounting mechanism (the reverse charge).
1.1 What this Information Sheet is about
This Information Sheet explains a new VAT accounting mechanism (the reverse charge). This will apply, with some exclusions explained below, to supplies of mobile phones and/or computer chips which are—
— valued at £5000 and over and
— made by one VAT-registered business to another.
The reverse charge applies to all such supplies made on or after 1 June 2007. Under the reverse charge accounting mechanism, it is the responsibility of the customer, rather than the supplier, to account to HMRC for VAT on supplies of the specified goods.
VAT-registered businesses which sell the goods described in section 2 below will need to consider whether the reverse charge applies to their transactions.
Businesses which purchase goods to which the reverse charge applies must account for VAT on those purchases to HMRC.
2 To which goods does the reverse charge apply?
2.1 The specified goods
The specified goods to which the reverse charge applies are—
— mobile telephones and
— computer chips.
2.2 Mobile telephones
For the purpose of the reverse charge, mobile telephones include:
— any handsets which have a mobile phone function (ie the transmitting and receiving of spoken messages), whether or not they have any other function – it therefore includes other communication devices, such as Blackberrys
— mobile phones supplied with accessories (such as a charger, battery, cover or hands-free