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UK to launch reverse VAT charges for CO2 trading

LONDON (Reuters) - Britain's tax authority will introduce reverse value-added tax (VAT) charges relating to carbon emissions trading from November 1, replacing a zero tax rate implemented last year to prevent fraud.

LONDON (Reuters) - Britain's tax authority will introduce reverse value-added tax (VAT) charges relating to carbon emissions trading from November 1, replacing a zero tax rate implemented last year to prevent fraud.

"Under the reverse charge accounting mechanism, it is the responsibility of the customer, rather than the supplier, to account to HM Revenue & Customs for VAT on supplies of the specified emission allowances," it said in a release on its website dated Friday.

The zero VAT rate was put in place in July 2009 as an interim measure to halt rapidly escalating carousel fraud in spot trading of European Union carbon permits, called EUAs, HMRC said.

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