The Business Bulletin
Domestic Reverse Charge – say what now? In March 2021, the VAT position changed as far as certain construction services are concerned with the introduction of Domestic Reverse Charge (DRC). So what led to this momentous change?
HMRC has bought about this change in a response to sustained criminal attacks of stealing public money through missing trader fraud. They calculate that this will prevent losses estimated at £100 million per year. The DRC is already in place in 18 EU member states for various goods and services. The diagram right shows how missing trader fraud works.  The customer will account for the VAT rather than the supplier by doing a reverse charge entry on their own VAT return. This means that as the supplier you will neither charge VAT nor collect it from the customer.
28 | Issue 9 – Finance
