Reverse charge

The reverse charge for mobile phones and computer chips was implemented with effect from 1 June 2007 to help counter missing trader intra-community carousel 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 runs until 30 April 2009.

On 10 March 2009 the European Council of Finance Ministers (ECOFIN) agreed in principle to the renewal of the UK’s derogation until April 2011. The Government is working with the Commission and the Member States to ensure that the legal text is adopted as soon as possible.

Formal agreement to the renewal text however may not be concluded before 30 April which means there would be a short gap between the expiry of the derogation and its renewal.

HMRC have published Revenue and Customs Brief 28/09 to explain that...