VAT domestic reverse charge – Which supplies does reverse charge apply to?

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VAT domestic reverse charge – Which supplies does reverse charge apply to?
Rod Love Jones

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VAT domestic reverse charge – Which supplies does reverse charge apply to?
Rod Love Jones

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VAT domestic reverse charge – Which supplies does reverse charge apply to?

The VAT domestic reverse charge accounting mechanism was implemented to help prevent criminal attacks on the UK VAT system through sophisticated fraud.

The domestic reverse charge procedure applies to the supply and purchase of 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 customer’s responsibility, 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 if the domestic reverse charge is required on a transaction or not. 

The domestic reverse charge should not be confused with a reverse charge for cross-border services that apply to certain services abroad.

As the leading digital firm of accountants in Norwich, we have a dedicated team of in-house tax specialists so please do get in touch if this affects you.

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