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VATA 1994, s 8 imposes a 'reverse charge' which transfers the liability to account for and pay tax on 'relevant services' from the person making the supply to the recipient ('R'). Where this reverse charge applies, all the same consequences (including, where appropriate, a liability to register for VAT in connection with such supplies) follow as if R had supplied the services in the UK in the course or furtherance of R's business and that supply were a taxable supply¹.

Therefore, R is treated as having made a supply of services. R must account for and pay tax in connection with that supply if R is a taxable person and must otherwise include the services in the value of R's taxable supplies for the purpose of determining R's liability to registration under VATA 1994, Sch 1. Subject to the provisions discussed in Division V3.4, R may also be entitled to input tax credit.

However, supplies made under this provision should be disregarded in calculating an entitlement to input tax credit². That is,