If you’re in the telecommunications industry, there is a change to VAT taking place as of today that you will need to know about…
What is the change?
New government legislation will mean that as of 1st of February 2016, a reverse charge accounting mechanism (domestic reverse charge) for wholesale supplies of telecommunications in the UK will be introduced. This will affect businesses that buy or sell wholesale telecommunications services in the UK.
What does this change mean?
A domestic reverse charge will mean the customer receiving the wholesale supply of telecommunications services must account for VAT due, rather than the supplier.
HMRC state that they recognise this timetable (the change stands as of 1st of February) will be challenging for some businesses, so they will be taking a “light touch” approach regarding penalties. This is to help those who are making efforts to comply but might not be able to do so in time.