Set Up Reverse Charge VAT

In Business Central, you can use reverse charge VAT accounting for a specific range of items to prevent Missing Trader Intercommunity Fund Fraud (MTIC), also known as carousel fraud. This feature is supplemented by the Reverse Charge Sales List report. The VAT accounting changes will affect companies trading in electronic goods and integrated circuit devices, such as mobile telephones, microprocessors, and central processing units. These goods will apply to reverse charges.

Important

Legislative information may be subject to change by HM Revenue & Customs (HMRC). For more information, see the HMRC website.

To reverse charges on VAT

  1. Choose the Search for Page or Report icon, enter VAT Business Posting Groups, and then choose the related link.
  2. Create a new VAT business posting group. Set up the needed VAT product posting groups.
  3. Choose the Search for Page or Report icon, enter General Ledger Setup, and then choose the related link.
  4. On the Reverse Charge FastTab, fill in the fields as necessary. Hover over a field to read a short description.
  5. Choose the Search for Page or Report icon, enter Sales & Receivables Setup, and then choose the related link.
  6. On the Reverse Charge FastTab, fill in the fields as necessary.
  7. Choose the Search for Page or Report icon, enter Purchases & Payables Setup and then choose the related link.
  8. On the Reverse Charge FastTab, fill in the fields as necessary.
  9. To set up items subject to reverse charge, select the item, and open the Item Card page.
  10. On the Invoicing FastTab, fill in the Reverse Charge Applies field.

Reverse Charge Sales List

This report displays sales of goods which are subject to reverse charge. The report is based on information in the VAT Entry table. You use this to report to the customs and tax authorities the reverse charge sales.

Examples of goods subject to reverse charge:

  • Mobile telephones.
  • Computer chips

Consult the HMRC website for the list of goods subject to reverse charge.

See Also

United Kingdom Local Functionality