On 7 January 2016, an order was made to provide that, with effect from 1 February 2016, and subject to some exceptions, the VAT reverse charge will apply to wholesale buying and selling of telecommunications services in the UK.

This measure is intended to prevent missing trader fraud.

Given the short timetable for the introduction of the charge, some businesses may find it challenging to comply. HMRC has confirmed it will be adopting a “light touch” approach regarding penalties in circumstances where taxpayers have made reasonable efforts to comply.

Brief 1/16 is available to view here.