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

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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