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Reverse charge accounting mechanism for GOs in the UK

Friday, 15 November 2019

Kevin Lim

UK government has introduced legislation, to introduce a reverse charge accounting mechanism for supplies of electricity certificates in the UK. The domestic reverse charge will apply to all Guarantees of Origin (GOs) unless the certificates are supplied as part of a power contract (such as a Power Purchase Agreement).

Under reverse charge accounting mechanism, it is the responsibility of the customer, rather than the supplier, to account for VAT to the UK government (HMRC). For example:

  1. ABC Ltd, a VAT-registered generator, sells 10,000 GOs to 123 Ltd, a VAT-registered supplier, for a VAT exclusive value of £6,000
  2. ABC Ltd does not charge VAT on the supply, spec...

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