Commentary

V7.319 Anti-fraud measures—reverse charge accounting for sales of certain goods

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.319 Anti-fraud measures—reverse charge accounting for sales of certain goods

Part V7 Tax planning | Commentary

V7.319 Anti-fraud measures—reverse charge accounting for sales of certain goods

HMRC introduced reverse charge rules with effect from 1 June 2007 in relation to the sale of mobile telephones and computer chips between VAT registered traders in the UK. The rules were subsequently extended to include emissions allowances from 1 November 2010 and wholesale supplies of gas and electricity from 1 July 2014. The reverse charge rules basically transfer the output tax liability on the sale of high-risk items from the supplier to the customer. The reverse charge only applies to the sale of mobile telephones and computer chips if the invoice value of the items in question exceeds £5,000 (excluding VAT). See Example 4 for an illustration of this point.

Note – full details about the reverse charge procedures in relation to the sale of mobile phones and computer chips are given in Notice 735.

With effect from 1 February 2016, reverse charge accounting was extended to supplies of wholesale telecommunications services between counterparties established in the UK. The reverse charge will cover

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