When does domestic reverse charge VAT apply?

The VAT domestic reverse charge accounting mechanism was put in place to help prevent criminal attacks on the UK VAT system, by means of sophisticated fraud.

The domestic reverse charge procedure applies to the supply and purchase of certain specified goods and services.

Goods:

• mobile phones 
• computer chips 
• wholesale gas 
• wholesale electricity 

Services:

• emission allowances 
• wholesale telecommunications 
• renewable energy certificates 
• construction services 

Under the domestic reverse charge rules, it is the responsibility of the customer, rather than the supplier, to account to HMRC for VAT on supplies of the specified goods or services. It should be noted that there are exceptions within each category, and it is important to check carefully if the domestic reverse charge is required on a transaction or not. 

The domestic reverse charge should not be confused with reverse charge for cross-border services which applies to certain services from abroad.