Range of supplies affected by VAT reverse charge
The VAT domestic reverse charge accounting mechanism was put in place to help prevent criminal attacks on the UK VAT system by means of sophisticated fraud.
The domestic reverse charge procedure applies to the supply and purchase of the certain specified goods and services.
The specified goods that the reverse charge applies to are:
- mobile phones
- computer chips
- wholesale gas
- wholesale electricity
The specified services are:
- emission allowances
- wholesale telecommunications
- renewable energy certificates
- construction services
Under the domestic reverse charge rules, it is the responsibility of the customer, rather than the supplier, to account to HMRC for VAT on supplies of the specified goods or services. It should be noted that there are exceptions within each category, and it is important to check carefully if the domestic reverse charge is required on a transaction or not.
The domestic reverse charge should not be confused with reverse charge for cross-border services which applies to certain services from abroad.
