How to: Set Up Reverse Charges on VAT

In Dynamics NAV, you can use reverse charge VAT accounting for a specific range of items to prevent Missing Trader Intercommunity Fund Fraud (MTIC), also known as carousel fraud. This feature is supplemented by the Reverse Charge Sales List report. The VAT accounting changes will affect companies trading in electronic goods and integrated circuit devices, such as mobile telephones, microprocessors, and central processing units. These goods will apply to reverse charges.

To reverse charges on VAT

1. Choose the icon, enter VAT Business Posting Groups, and then choose the related link.
2. Create a new VAT business posting group. Set up the needed VAT product posting groups.
3. Choose the icon, enter General Ledger Setup, and then choose the related link.
4. On the Reverse Charge FastTab, fill in the fields as necessary. Choose a field to read a short description of the field or link to more information.
5. Choose the icon, enter Sales & Receivables Setup, and then choose the related link.
6. On the Reverse Charge FastTab, fill in the fields as necessary.
7. Choose the icon, enter Purchases & Payables Setup and then choose the related link.
8. On the Reverse Charge FastTab, fill in the fields as necessary.
9. To set up items subject to reverse charge, select the item, and open the Item Card window.
10. On the Invoicing FastTab, fill in the Reverse Charge Applies field.

Reverse Charge Sales List

This report displays sales of goods which are subject to reverse charge. The report is based on information in the VAT Entry table. You use this to report to the customs and tax authorities the reverse charge sales.

Examples of goods subject to reverse charge:

• Mobile telephones.
• Computer chips

Consult the HMRC website for the list of goods subject to reverse charge.

See Also

Dynamics 365 Business Central
United Kingdom Local Functionality