Revenue & Customs Brief 34/09
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.
Further Information
For further information on the reverse charge for mobile phones and computer chips please see Public Notice 735: VAT Reverse charge for mobile phones and computer chips.
Issued 18 June 2009
