HM Revenue and Customs Brief 34/09
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Issued 18 June 2009
VAT - Reverse charge accounting for businesses trading in
mobile telephones and computer chips: renewal of EU derogation
Who needs to read this?
Businesses buying and/or selling any of the following goods:
- Mobile telephones
- Integrated circuit devices, such as microprocessors and
central processing units, in a state prior to integration into end user
products
Further to Revenue & Customs brief 28/09 HMRC can now
confirm that the Government's application to renew the derogation was
formerly agreed on 5 May 2009 by the European Council of Finance
Ministers (ECOFIN). The agreement has retroactive effect from 1 May
2009 meaning that legal vires for the reverse charge is unbroken.
Background
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 these goods to perpetrate missing trader
intra-community (MTIC) 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 ran until 30 April 2009. The Government
announced in its Pre-Budget Report 2008 that it had applied for a
renewal of the derogation.
On 10 March 2009 the ECOFIN agreed, in principle, to the
renewal of the UK's derogation until April 2011 and it is this decision
that has now been formerly ratified and published under Official
Journal reference 2009/439/EC.
© Crown Copyright 2009.
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