From 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.
The charge applies to standard and reduced-rate VAT services:
- for individuals or businesses who are registered for VAT in the UK
- reported within the Construction Industry Scheme
You’ll need to check when you must use the reverse charge on your sales, purchases or both and make sure your accounting systems and software can deal with the reverse charge. You should also consider whether the change will impact your cash flow especially if you make supply services and your customer has not given written confirmation that they are an end user or intermediary supplier.
Speak to an adviser for help so you are prepared for the new rules.