taxes

What is reverse charge?

According to HMRC: “When you buy services from suppliers in other countries, you may have to account for the VAT yourself - depending on the circumstances. This is called the ‘reverse charge’, and is also known as ‘tax shift’. Where it applies, you act as if you’re both the supplier and the customer. You charge yourself the VAT and then (assuming that the service relates to VAT taxable supplies that you make) you also claim it back. So the 2 taxes cancel each other out.”

The reverse charge on services applies only when the supplier is in a different country from you, you’re in business, belong in the UK.

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