Domestic reverse charge applies from February

Revenue and Customs Brief 1/2016 provides guidance on what is covered by the domestic reverse charge and what is excluded. It includes a copy of the draft legislation implementing the reverse charge.

The brief can be accessed on GOV.UK . It should be read in conjunction with VAT Notice 735: VAT domestic reverse charge on specified goods and services.

The charge will take effect from 1 February 2016. It will apply to the wholesale buying and selling of telecommunications services in the UK typically transmission or carriage services of airtime and telephony-related data.

Recognising that this timetable may be challenging for some businesses HMRC will be adopting a “light touch” to penalties for those who despite making reasonable efforts may not be able to comply in time.

There may be supplies which contain a mixture of reverse charge and non-reverse charge supplies. Among them are those...