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CIS VAT Reverse Charge

The construction industry will see a huge change in how they charge VAT from the 1 March 2021

If your business is supplying building and construction industry services and are VAT registered and trading in the UK these changes will apply to you.

If you buy or sell building and construction services business, you will need to determine when the reverse charge will need to be used.

The CIS reverse charge does not apply to any of the following supplies:

  • Supplies of VAT exempt building and construction services.
  • Supplies that are not covered by the CIS, unless linked to such a supply.
  • Supplies of staff or workers.

The CIS reverse charge does not apply to taxable supplies made to the following customers:

  • A non-VAT registered customer.
  • ‘End Users’ i.e. a VAT registered customer who is not intending to make further on-going supplies of construction.
  • ‘Intermediary suppliers’ who are connected e.g. a landlord and his tenant or two companies in the same group.

The aim of the measure is to reduce VAT fraud in the construction sector.

If you would like to speak to one of our specialist to discuss these change and how we can help, please get in touch.

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