- RC VAT code
What is the VAT code "RC"?
The VAT code "RC" (reverse charge) is for the new VAT rule for supplies of mobile phones or computer chips. The reverse charge mechanism applies only to supplies of specified goods within the UK made by one VAT-registered business to another.
Under the reverse charge mechanism, the purchaser of the goods, rather than the seller, is liable to account for the VAT on the supply. The supplier will not charge VAT, but will have to specify on his invoice that the reverse charge applies. The purchaser must account for VAT, but has the right to input tax recovery on the same VAT return, subject to the normal rules.
When you use the RC VAT code, here's where the VAT is reported on your return:
| VAT Code | Description | How does this report on my VAT 100 return? | |
| If used on purchase form | If used on sales form | ||
| RC | Reverse Charges | VAT at 17.5% to box 1 and box 4 | No VAT |
| Net purchase amount to box 7 | Net sale amount to box 6. | ||
For more information, including details on applicable goods, contact HMRC and obtain their VAT Information Sheet, "VAT: Reverse charge for purchases and sales of mobile phones and computer chips".
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