Posted: 19 June 2009
Issue: Vol 163, Issue 4211
Categories: News, Update, VAT, Tax adviser, Legal, Government, VAT Admin

With effect to April 2011

The VAT reverse charge for mobile phones and computer chips has been extended to April 2011. 

Further to Revenue & Customs Brief 28/09, HMRC confirm that the Government's application to renew the derogation was formerly agreed on 5 May 2009 by the European Council of Finance Ministers.

The agreement has retroactive effect from 1 May 2009, meaning that legal vires for the reverse charge is unbroken.

The reverse charge for mobile phones and computer chips was implemented with effect from 1 June 2007 to remove the opportunity for fraudsters to use goods to perpetrate missing trader intra-community fraud.

As an exception to the normal accounting rules for VAT, the UK has a derogation from EU law to apply this anti-fraud measure, which ran until 30 April 2009.

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