JSL2300 - Legislation: Impact of the reverse charge for specified goods
With effect from 1 June 2007, the way in which output tax is accounted for on the supply of mobile phones and computer chips between UK VAT-registered taxable persons changed. Where the VAT-exclusive value of the supply is £5,000 or more, it is the responsibility of the customer (rather than the supplier) to account to HMRC for the VAT on the supply.
However, the goods covered by the reverse charge for specified goods are not as wide ranging as the first 2 categories of specified goods covered by JSL (JSL2200). Furthermore, the third category of specified goods (i.e. other electronic equipment) is also not covered by the reverse charge and so normal accounting rules apply for these types of goods.
In practice, it is envisaged that joint and several liability will apply in limited circumstances in the ‘traditional’ Missing Trader supply chains where the reverse charge applies. It is likely that it will only apply (subject to the criteria in JSL3000 and JSL4000) where there is evidence of actual knowledge or collusion. Any officer considering applying JSL in transaction chains where the reverse charge applies must contact the VAT Fraud Team (JSL1300) at a very early stage in their considerations.
Policy guidance on the application of the reverse charge for specified goods is available in the Reverse Charge guidance manual and Notice 735 Domestic reverse charge procedure.