VAT reverse charge definition
Buying services from businesses outside of the UK requires you to account for VAT with the reverse charge.
The reverse charge will not apply to you if you are not registered for VAT.
If you had purchased the service in the UK, the reverse charge would have been the amount of VAT you would have paid. This amount must be added to the total amount of VAT you plan to pay to HMRC each quarter, as well as to the amount of VAT you plan to reclaim. HMRC doesn’t charge you anything extra or let you reclaim anything extra.
Also read VAT Threshold
Example:
The translation of a webpage may have been done for you by a translator in France. For this work, you would have had to pay 20% VAT if you hired someone in the UK. A reverse charge of £20 would result from a service worth £100, or £100 x 20%.
Also, read How to Calculate VAT Exclusive in Maths Literacy?
