»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp reverse charge applies where a UK recipient receives services from a non-UK supplier. Normally, it is the supplier of a service who must account to the tax authorities for any VAT due on their supplies. However, for certain services, the position is reversed, and it is the customer who must account for any VAT due. This procedure is referred to in this manual as ‘reverse chargeâ€�, but it is also referred to by some people as ‘tax shiftâ€�.

Accounting for VAT using the reverse charge procedure is not a complicated procedure in accounting terms.

Instead of being charged VAT by the supplier, a UK business customer who receives any of the relevant services credits his VAT account with the necessary amount of output tax as if he had supplied the services himself.

»Ê¹ÚÌåÓýapp customer accounts for the output tax as if they had a made the supply to themselves, see the rules set out in Section 8 of the Value Added Tax act 1994.

»Ê¹ÚÌåÓýapp VAT may then be recovered as input tax subject to the normal rules set out in section 24 of the Value Added Tax Act 1994.

»Ê¹ÚÌåÓýapp practical effect of this is that there will be no net tax payable on the transaction except by businesses which are not entitled to full deduction of input tax, such as those which are partly exempt.