VAT reverse charge for building and construction services
This applies to individuals and businesses who are BOTH
> Within the Construction Industry Scheme, AND
> Registered for VAT
From the 1st March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.
What you need to do
> Check when you must use the reverse charge on your sales, purchases or both (see below)
> Find out how the charge works if you supply services
> Find out how the charge works if you buy services
> Read more detailed guidance about the reverse charge
> Contact us if you need any further help or advice
HMRC have published the following helpful flow charts to determine if you need to use the reverse charge:
When you must use the reverse charge on your sales, purchases or both:
> constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
> constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
> installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
> internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
> painting or decorating the inside or the external surfaces of any building or structure
> services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works
Please ensure that your VAT systems are ready for the introduction of the new charge. Please let us know if you need any further help.