NEW LEGISLATION

FROM 1 MARCH 2021.

The Construction Industry Scheme (CIS)  and the way you handle and pay VAT is changing.

The VAT domestic reverse charge for building and construction services affects the supply of certain kinds of construction services in the UK. 

Both contractors and subcontractors are affected.

It means VAT registered subcontractors (suppliers) who provide a service and any related goods to a VAT-registered contractor (customer) who’s CIS-registered no longer need to account for the VAT.

Instead, the customer accounts for the VAT as an input tax, as if they’ve made the supply to themselves.

This includes any building and construction materials used to supply the services (although not materials bought and sold without related services).

The VAT domestic reverse charge for building and construction services is mandatory, therefore you can’t opt in or out, or choose to apply it only to certain invoices.

VAT domestic reverse charge for construction checklist

To support you with the VAT reverse charge, we’ve created a flow chart so you can ensure your processes are in order.

If you need further help please call us free on 0800 011 3226