Value Added Tax Act 1994 section 8

Reverse charge on supplies received from abroad

Section 8 requires UK business recipients of services supplied from abroad to account for VAT on those services as if they themselves had made the supply — commonly known as the "reverse charge".

• When a UK business person receives services from an overseas supplier and the place of supply is in the United Kingdom, the recipient must account for VAT as though they had made the supply themselves, treating it as a taxable supply.
• Reverse charge supplies treated as made by the recipient are excluded from the calculation of input tax recovery under the partial exemption rules, so they do not distort the recipient's input tax entitlement.
• The reverse charge does not apply to services that are exempt under Part 2 of Schedule 9 (unless those services are also listed in Part 3 of that Schedule), and the Treasury may amend this exclusion by order.
• The time of supply for a reverse charge transaction is determined by regulations rather than by the normal tax point rules, reflecting changes introduced as part of the VAT Package from 1 January 2010.