VAT Domestic Reverse Charge - Revision history

Editor: moved VAT reverse charge to VAT Domestic Reverse Charge

2026-02-26T08:05:51Z

moved VAT reverse charge to VAT Domestic Reverse Charge

← Older revision

Revision as of 08:05, 26 February 2026

Designing Buildings at 08:52, 10 November 2021

2021-11-10T08:52:22Z

← Older revision		Revision as of 08:52, 10 November 2021
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	Andy Mitchell, chairman of the Construction Leadership Council said: “The implementation of Reverse charge VAT will restrict cashflow in our industry, especially to the smallest firms, at an extremely critical financial period for many businesses. This policy risks reversing any recovery industry has made from Covid-19 and will limit the scope for protecting and creating jobs across the UK.”		Andy Mitchell, chairman of the Construction Leadership Council said: “The implementation of Reverse charge VAT will restrict cashflow in our industry, especially to the smallest firms, at an extremely critical financial period for many businesses. This policy risks reversing any recovery industry has made from Covid-19 and will limit the scope for protecting and creating jobs across the UK.”

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Implementation =
		+
		+	In Novermber 2021, subcontractors complained that they were waiting too long to to receive VAT repayments. An HMRC spokesperson said: “HMRC aim to make VAT repayments within 30 calendar days of receiving a return. In most cases claims are paid within five working days of receipt of the return. However, if we select it for verification checks, this could take 30 days or longer, dependent upon how long it takes the customer to provide the information requested to verify the return.”
		+
		+	= Related articles on Designing Buildings =

	* Business rates.		* Business rates.

Designing Buildings at 09:04, 1 March 2021

2021-03-01T09:04:25Z

← Older revision		Revision as of 09:04, 1 March 2021
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	Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]		Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]
		+
		+	More information about the reverse charge can be found at: [https://www.gov.uk/guidance/vat-reverse-charge-technical-guide https://www.gov.uk/guidance/vat-reverse-charge-technical-guide]

	= Criticism and delay =		= Criticism and delay =

Designing Buildings at 09:02, 1 March 2021

2021-03-01T09:02:40Z

← Older revision		Revision as of 09:02, 1 March 2021
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−	Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.	+	= Introduction =

−	~~The government announced that from 1 March 2021,~~ a ~~domestic VAT reverse charge would come into effect~~ to ~~tackle fraud in~~ the ~~construction industry~~. ~~A reverse charge enables a customer to charge themselves~~ VAT ~~rather than the supplier charging it~~. ~~This removes any opportunity for the supplier not to pay HMRC (missing trader fraud)~~.	+	Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold.

−	~~The~~ reverse charge ~~will apply to businesses that supply~~ services to ~~another business that will then sell~~ on ~~that service~~, ~~but~~ not ~~those that supply services to consumers.~~	+	In June 2018, the government launched a consultation on the introduction of a VAT reverse charge for construction services to tackle fraud in the construction industry. This was originally intended to come into effect on 1 October 2019, however following lobbying it did not actually come into effect until 1 March 2021

−	Sometimes referred to as the domestic reverse charge ~~is intended to apply~~ only to supplies of specified construction services which are subject to the standard and reduced rate of VAT, which include:	+	The reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).
		+
		+	The reverse charge applies to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.
		+
		+	Sometimes referred to as the domestic reverse charge, it applies only to supplies of specified construction services which are subject to the standard and reduced rate of VAT, which include:

	* Construction, alteration, repair, extension, demolition or dismantling of buildings, structures, non-permanent structures, offshore installations, works forming part of land (i.e. walls, runways, docks, railways, pipelines, etc.).		* Construction, alteration, repair, extension, demolition or dismantling of buildings, structures, non-permanent structures, offshore installations, works forming part of land (i.e. walls, runways, docks, railways, pipelines, etc.).
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	* Services which are an integral part of preparing or completing those above (e.g. site clearance, excavation, scaffolding erection, landscaping, and so on).		* Services which are an integral part of preparing or completing those above (e.g. site clearance, excavation, scaffolding erection, landscaping, and so on).

−	Services and supplies that ~~will be~~ excluded from the reverse charge include:	+	Services and supplies that are excluded from the reverse charge include:

	* Drilling and extraction of oil, natural gas, and minerals.		* Drilling and extraction of oil, natural gas, and minerals.
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	Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]		Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]
		+
		+	= Criticism and delay =

	In July 2019, the Federation of Master Builders called for a six-month delay following research that found more than two thirds of construction SMEs had not even heard of the reverse charge.		In July 2019, the Federation of Master Builders called for a six-month delay following research that found more than two thirds of construction SMEs had not even heard of the reverse charge.
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	Ref [https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation]		Ref [https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation]

−	In June 2020 the Government delayed the introduction of reverse charge VAT by a further five months due to the Coronavirus pandemic. ~~It will now be~~ introduced on 1 March 2021.	+	In June 2020 the Government delayed the introduction of reverse charge VAT by a further five months until 1 March 2021 due to the Coronavirus pandemic. Despite continued lobbying to push back this date further, the reverse charge was introduced on 1 March 2021.
		+
		+	Andy Mitchell, chairman of the Construction Leadership Council said: “The implementation of Reverse charge VAT will restrict cashflow in our industry, especially to the smallest firms, at an extremely critical financial period for many businesses. This policy risks reversing any recovery industry has made from Covid-19 and will limit the scope for protecting and creating jobs across the UK.”

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

81.105.55.130 at 09:45, 8 September 2020

2020-09-08T09:45:13Z

← Older revision		Revision as of 09:45, 8 September 2020
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	Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.		Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.

−	The government announced that from 1 ~~October 2019~~, a domestic VAT reverse charge would come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).	+	The government announced that from 1 March 2021, a domestic VAT reverse charge would come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).

	The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.		The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.
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	* VAT - Protected Buildings.		* VAT - Protected Buildings.

−	[[Category:~~Policy~~]] [[Category:~~DCN_Policy~~]] [[Category:~~Taxation~~]] [[Category:~~Products_/_components~~]] [[Category:~~DCN_Product_Knowledge~~]] [[Category:Roles_/_services]]	+	[[Category:DCN_Policy]] [[Category:DCN_Product_Knowledge]] [[Category:Policy]] [[Category:Taxation]] [[Category:Products_/_components]] [[Category:Roles_/_services]]

Designing Buildings at 13:15, 5 June 2020

2020-06-05T13:15:38Z

← Older revision		Revision as of 13:15, 5 June 2020
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	Ref [https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation]		Ref [https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation]

−	~~= Find out more =~~	+	In June 2020 the Government delayed the introduction of reverse charge VAT by a further five months due to the Coronavirus pandemic. It will now be introduced on 1 March 2021.

−	=== Related articles on Designing Buildings Wiki ===	+	= Related articles on Designing Buildings Wiki =

	* Business rates.		* Business rates.
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	* VAT - Protected Buildings.		* VAT - Protected Buildings.

−	[[Category:Policy]] [[Category:Taxation]] [[Category:Products_/_components]] [[Category:Roles_/_services]]	+	[[Category:Policy]] [[Category:DCN_Policy]] [[Category:Taxation]] [[Category:Products_/_components]] [[Category:DCN_Product_Knowledge]] [[Category:Roles_/_services]]

Designing Buildings at 08:55, 9 September 2019

2019-09-09T08:55:05Z

← Older revision		Revision as of 08:55, 9 September 2019
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	Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.		Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.

−	~~From~~ 1 October 2019, a domestic VAT reverse charge ~~will~~ come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).	+	The government announced that from 1 October 2019, a domestic VAT reverse charge would come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).

	The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.		The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.
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	In July 2019, the Federation of Master Builders called for a six-month delay following research that found more than two thirds of construction SMEs had not even heard of the reverse charge.		In July 2019, the Federation of Master Builders called for a six-month delay following research that found more than two thirds of construction SMEs had not even heard of the reverse charge.
		+
		+	In September 2019, following strong lobbying by the construction industry the government announced that the reverse charge would not be introduced until 1 October 2020, stating:
		+
		+	{\|
		+	\|width="100%"\|
		+	Industry representatives have raised concerns that some businesses in the construction sector are not ready to implement the VAT domestic reverse charge for building and construction on 1 October 2019.
		+
		+	To help these businesses and give them more time to prepare, the introduction of the reverse charge has been delayed for a period of 12 months until 1 October 2020. This will also avoid the changes coinciding with Brexit.
		+	\|}
		+
		+	Ref [https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-10-2019-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation]

	= Find out more =		= Find out more =

Designing Buildings at 12:37, 15 July 2019

2019-07-15T12:37:12Z

← Older revision		Revision as of 12:37, 15 July 2019
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	Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.		Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.

−	From October 2019, a domestic VAT reverse charge will come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).	+	From 1 October 2019, a domestic VAT reverse charge will come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).

	The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.		The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.
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	* Installation of seating, blinds, shutters, etc.		* Installation of seating, blinds, shutters, etc.
	* Installation of security systems and alarms.		* Installation of security systems and alarms.
−
−	Draft legislation has been published by HMRC with the final version of the order and guidance expected by October 2018. Businesses that are expected to be affected have been advised to identify instances where they may need to apply the reverse charge.

	Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]		Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]
		+
		+	In July 2019, the Federation of Master Builders called for a six-month delay following research that found more than two thirds of construction SMEs had not even heard of the reverse charge.

	= Find out more =		= Find out more =

Designing Buildings at 06:55, 10 July 2018

2018-07-10T06:55:20Z

← Older revision		Revision as of 06:55, 10 July 2018
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	Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.		Value Added Tax (VAT) is a tax added to the cost of certain goods and services. It is only accountable where the party raising an invoice is VAT-registered. Parties must register if their VAT-able turnover exceeds a minimum threshold in any 12-month period.

−	From October 2019, a domestic VAT reverse charge will come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC.	+	From October 2019, a domestic VAT reverse charge will come into effect to tackle fraud in the construction industry. A reverse charge enables a customer to charge themselves VAT rather than the supplier charging it. This removes any opportunity for the supplier not to pay HMRC (missing trader fraud).

	The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.		The reverse charge will apply to businesses that supply services to another business that will then sell on that service, but not those that supply services to consumers.

Designing Buildings at 06:53, 10 July 2018

2018-07-10T06:53:59Z

← Older revision		Revision as of 06:53, 10 July 2018
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	Draft legislation has been published by HMRC with the final version of the order and guidance expected by October 2018. Businesses that are expected to be affected have been advised to identify instances where they may need to apply the reverse charge.		Draft legislation has been published by HMRC with the final version of the order and guidance expected by October 2018. Businesses that are expected to be affected have been advised to identify instances where they may need to apply the reverse charge.
		+
		+	Ref [https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services https://www.gov.uk/government/consultations/draft-legislation-vat-reverse-charge-for-construction-services]

	= Find out more =		= Find out more =