16.10.2006

In order to combat widespread fraud, new VAT procedures are to apply to the sale
to businesses of mobile telephones and other small electrical items. The seller will no longer charge VAT on affected supplies, and the buyer will account for VAT on the purchase under a procedure known as "reverse charge". To minimise the effect of this on low value transactions, the new rules will not apply to transactions of less than £1,000, so a business purchasing a single mobile phone will not be affected. The new rules are expected to commence on 1 December 2006.

If you would like further information, or if you have any other concerns about VAT issues, contact us and one of our advisers will get in touch with you.