Font Size

HM Revenue and Customs Brief 34/09

 By

HM Revenue and Customs -Tax Authorities

Tax Articles
Submit Articles   Back to Articles

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:

  1. Mobile telephones
  2. 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.


About the Author

Crown Copyright 2009.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.



Follow us @Scopulus_News

Article Published/Sorted/Amended on Scopulus 2009-06-20 00:07:09 in Tax Articles

All Articles

Copyright © 2004-2019 Scopulus Limited. All rights reserved.