In summary, the Reverse Charge applies if you buy a B2B service (except for exempt supplies) from outside of the UK even if they have a UK VAT registration number.

You calculate the amount of VAT (output tax) on the full value of the services supplied to you and then enter on your VAT Return the:

  • amount of VAT you calculated in box 1 and, if you’re entitled to reclaim the VAT on your purchase of these supplies, also put the same figure in box 4 (this in effect cancels out the figure in box 1)
  • full value of the supply in both box 6 and box 7

The example below shows a VAT Return completed where a VATable service for £100.00 has been purchased from a company outside of the UK:

VAT due in this period on sales and other outputs 

1

20.00 

VAT due in this period on acquisitions from other EC Member States

2

0.00 

Total VAT due (the sum of boxes 1 and 2)

3

20.00 

VAT reclaimed in this period on purchases and other inputs
(including acquisitions from the EC)

4

20.00 

Net VAT to be paid to HMRC or reclaimed by you
(Difference between boxes 3 and 4)

5

0.00

Total value of sales and all other outputs excluding any VAT.
Include your box 8 figure

6

100.00 

Total value of purchases and all other inputs excluding any VAT.
Include your box 9 figure

7

100.00 

Total value of all supplies of goods and related costs, excluding any VAT, to other EC Member States

8

0.00 

Total value of all acquisitions of goods and related costs,
excluding any VAT, from other EC Member States

9

0.00 

 

For detailed information please visit the HMRC website: https://www.gov.uk/topic/business-tax/vat

 

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