Reverse charge VAT is required on sales and purchases of mobile telephones, computer chips, microprocessors, or central processing units for business purposes within the United Kingdom. Under reverse charge VAT rules, the buyer of the goods, instead of the seller, is liable to account for the VAT on the sale.

The seller does not charge VAT, but both the items that are subject to reverse charge VAT and the total amount of reverse charge VAT are noted on the invoice. These items also are identified on VAT 100 reports as being subject to reverse charge. You can use the Reverse charge sales listreport to view information about reverse charge sales on a periodic basis. Depending on how your system is set up, this information can be calculated automatically for sales orders.

1. Click Accounts receivable> Common Forms> Sales Order Details .

2. Select a customer account.

3. Right-click the customer account and click Go to the Main Table Form.

4. On the Setuptab of the Customersform, verify that the customer's VAT number is displayed in the Tax exempt numberfield. If necessary, add it. For more information, see Attach a tax exempt number to a customer. Close the form.

5. In the Sales orderform, enter line items for the order.

6. Press CTRL+S to save the order. If applicable, reverse charge VAT is calculated. When the invoice is printed, the total amount of the reverse charge is shown on the invoice.