- In certain cases, customers must account for VAT instead of suppliers, such as when buying services from overseas, deregistering goods, using the domestic reverse charge (DRC), or supplying mobile phones/computer chips.
- The reverse charge mechanism requires recipients to declare both output and input VAT on their VAT return, ensuring fairness and compliance.
- Self-supply VAT applies during deregistration, leaving the flat rate scheme, or for private use of business fuel, with output tax due but no input tax recovery.
- The domestic reverse charge applies to construction services and certain high-value goods to prevent VAT fraud, shifting VAT responsibility to the recipient.
- Failure to correctly apply reverse charge or self-supply rules can result in HMRC penalties and interest, but proper accounting entries can resolve issues.
Source: fiscal-requirements.com
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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