Domestic reverse charge ― wholesale electronic communication services

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of the scope of the domestic reverse charged applied in respect of wholesale electronic communication services. This note should be used in conjunction with the Domestic reverse charge ― overview and Domestic reverse charge ― accounting requirements guidance notes.

Background

HMRC announced that the scope of the reverse charge is extended to cover supplies of wholesale telecommunication services, including satellite, in the UK with effect from 1 February 2016. The changes will impact the following types of businesses:

•
airtime carriers
•
network operators
•
message hubbing providers
•
short messaging service (SMS) and voice aggregators

VATA 1994, ss 1(2), 55A; Value Added Tax (Section 55A) (Specified Services and Excepted Supplies) Order 2016, SI 2016/12; Revenue and Customs Brief 1 (2016); VAT notice 735, para 3.7

The changes are applicable to the wholesale buying and selling of telecommunication services in the UK. The term ‘wholesale’ will mean business-to-business supplies where the receiving business intends to resell the supply with no or negligible consumption

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