A domestic reverse charge requires a UK customer receiving supplies to account for the VAT due, rather than the UK supplier. This mechanism is used to remove the scope for the supplier to not account for the VAT due to HMRC.
Domestic reverse charges have been used for carbon emissions allowances, gas and electricity, telecommunication services, trading of renewable energy certificates and construction services. However, the domestic reverse charge for mobile phones and computer chips was the only one with a requirement to complete a reverse charge sales list.
While the requirement to operate the domestic reverse charge procedure will continue for supplies of mobile phones and computer chips, HMRC has announced that sales lists are required for all periods that include sales made up to 30 June 2022. The removal of the requirement from 1 July 2022 is a welcome administrative simplification and a suggestion made in a recent ICAEW TAXline article.
A final reverse charge sales list for the period up to 30 June 2022 must be submitted with the 06/22 monthly VAT return, or the 06/22, 07/22 or 08/22 quarterly VAT return, depending on the VAT stagger applicable to the business. Businesses that submit annual VAT returns or non-standard VAT returns that include the period to 30 June 2022, but where the return will be filed on or after 17 October 2022, must submit a separate reverse charge sales list for the period up to 30 June 2022 by 17 October 2022.
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