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HM Revenue and Customs Brief 36/13


HM Revenue and Customs -Tax Authorities

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Issued 9 December 2013

VAT: Reverse charge accounting for businesses trading in mobile telephones, computer chips and emissions allowances: continuation of current treatment.

Who needs to read this?

Businesses buying and / or selling any of the following:

  • mobile telephones
  • integrated circuit devices, such as microprocessors and central processing units, in a state prior to integration into end user products
  • emissions allowances, emissions reduction units and emissions reduction certificates

Further to EU Directive 2013/43/EU introducing the Reverse Charge Mechanism, HMRC can confirm that the UK will continue to apply the reverse charge for mobile telephones, computer chips and emissions allowances in their current forms. The Reverse Charge Mechanism allows these measures to run until the end of 2018.


The reverse charge for mobile phones and computer chips was implemented in the UK 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 secured agreement to derogate from EU law to apply this anti-fraud measure, which originally ran until 30 April 2009. The derogation was then renewed in 2009 and again in 2011.

A zero rate for emissions allowances was introduced on 31 July 2009 as an interim measure to halt rapidly escalating MTIC fraud in this area, pending agreement on a common EU-wide countermeasure. A Directive providing an option for all Member States to introduce a reverse charge was adopted in March 2010 and the UK's reverse charge for emission allowances was implemented with effect from 1 November 2010.

The EU legal base for the reverse charge for mobile telephones and chips has now been superseded by the Reverse Charge Mechanism. The Directive also has the effect of extending the period of validity of the reverse charge for carbon credits from 30 June 2015 to the end of 2018. However, no changes are required to UK law which will continue to apply in its current form.

The Reverse Charge Mechanism allows Member States the option to introduce a reverse charge without a derogation for other goods and services subject to MTIC fraud; these are: gas, electricity, games consoles, tablet PCs, laptops, industrial crops and raw and semi-finished metals.

Further Information

For further information on the reverse charge please see Public Notice 735: VAT reverse charge on specified goods and services.

About the Author

Crown Copyright 2013.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2013-12-12 12:21:05 in Tax Articles

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