Thanks in part to the initiative of one our clients, HM Revenue & Customs announced legislation to introduce a reverse charge accounting mechanism for wholesale supplies of telecommunications services in the UK. The Government has stated that it is introducing this ‘in response to the threat of missing trader intra-community fraud in those supplies’. In summary, the change means that the customer receiving the wholesale supply of telecommunications services must account for the VAT due rather than the supplier. The Government adds that: ‘in turn the customer deducts the VAT due on the supply as an input, meaning no net tax is payable to HM Revenue and Customs (HMRC). This removes the scope to evade any VAT owing to HMRC.’ More information can be found at https://www.gov.uk/government/publications/revenue-and-customs-brief-1-2016-vat-domestic-reverse-charge-for-businesses-wholesaling-telecommunications-services/revenue-and-customs-brief-1-2016-vat-domestic-reverse-charge-for-businesses-wholesaling-telecommunications-services The domestic reverse charge will apply to ‘all wholesale supplies of telecommunications services between counterparties established in the UK’, although there will be certain exceptions. The reverse charge will take effect from 1 February 2016. HMRC has acknowledged that the timetable may be ‘challenging’ for some businesses and will therefore be adopting a ‘light touch’ approach regarding penalties to help those who are making reasonable efforts to comply but may not be able to do so in time’. More information is available on the Government website here.